Won Gains Now Over 4% In June To Date

Won sentiment remained on the front foot post the Asia close, the 1 month USD/KRW holding sub 1270 through much of this period. We finished the NY session around 1265, a gain in won terms of near 1.40%. The currency was unfazed by the surge in core yields. Note onshore spot ended yesterday at 1271.50.

• The won continues to benefit from the rebound in global equity sentiment, showcasing its high beta with respect to such moves. Tech equity indices rose again in the US on Tuesday, albeit at slower pace compared to Monday's gains.
• This, along with broader equity gains, leaves a positive lead for the Kospi today (to recap, the index rose 0.33% yesterday, while offshore investors added $269.5mn).
• Won is the clear standout performer in Asia FX in June to date, gaining 4.3% (IDR is the next best at 0.90%). Early Feb lows in USD/KRW around 1250 is the next potential downside target, with key EMAs and MA levels siting above 1300.
• Outside of equity optimism, hopes of a better H2 for the South Korean economy, the other potential won support is repatriated flows from onshore corporates, see this link for more details, which we posted as part of our local news highlights yesterday.
• On the data front, trade prices have already printed, with import prices slumping -12.0% y/y, while export prices were down -11.2% y/y.
• Still to come is the May unemployment rate (2.7% forecast versus 2.6% prior), while Apr money supply figures are also due later.