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With USDKRW holding neckline support and......>

KOREA
KOREA: With USDKRW holding neckline support and the 55-dma at the 1115/1116 area
the focus now returns to the upper end of the trading range. The fundamental
picture is becoming very won negative as rate expectations are falling at a time
when inflation expectations are rising on the back of fiscal expansion plans. 
- As a result, real yields are plunging, with the 2-year swap trading at 87bps
above medium-term breakeven inflation expectations, down 25bps in just over two
weeks. 
- While still higher than their US equivalents, the trend is bullish for the
dollar and suggests USDKRW should be trading ~8% higher than current levels
based on historical correlations.  

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