Won Slightly Weaker, Holding Last Week's Gains

The won is weaker in early trade, USD/KRW playing catch up to the greenback's move on Friday and gapping higher at the open, the pair last up 1.30 at 1128.15. The move higher is small in comparison to the jump lower following strong export data pre-market on Friday. The won rose the most in two weeks on Friday after exports rose 53.3% in the first 20 days of May. Elsewhere data showed producer prices rose at the fastest pace in a decade. Markets now look ahead to the BoK meeting later this week with the strong data increasing expectations of a more hawkish statement.

• On the coronavirus front South Korea's reported 538 daily new cases, below 600 for the second straight day Monday on fewer tests over the weekend, with a rebound in the reproduction rate, coupled with sporadic cluster infections, straining the country's antivirus fight. Starting Monday, South Korea extended its tight social distancing scheme by three more weeks through June 13. Authorities said the country's R-rate reached 1.04, indicating that a COVID-19 patient transmits the virus to at least one person. It marked the first time for the figure to hover above one since mid-April.
• Elsewhere South Korean President Moon has returned from his summit with US President Biden, on the back of the visit South Korea and the US have announced an agreement to deepen cooperation in a range of industries including pharmaceutical companies making Covid-19 vaccines, electric-vehicle batteries and semiconductor producers.