SOUTH KOREA: Country Wrap: Extra Budget Plan Presented Thursday
- South Korean President Lee Jae Myung and Japan’s Prime Minister Shigeru Ishiba agreed to step up cooperation in their first in-person talks, in an early indication of the direction of future relations between the two countries after Lee took office. (source BBG)
- South Korea will include tax revenue adjustment and consumption vouchers for all citizens in extra budget plan which will be presented to cabinet meeting on Thursday, ruling Democratic Party’s chief policymaker Jin Sung-joon says. Additional support for low income earners will be added; extra budget plan will also have debt relief for small business owners. Size of extra budgets, including first extra budget, would be around total ~35t won, Jin tells reporters after meeting with government. (source BBG)
- The KOSPI's good run continued and is up +0.45% today and approaching a +2.00% gain over the last week.
- The Won was the best regional performer today, gaining +0.23% to 1,371.17
- Bonds saw higher yields by 1-2bps. KTB 10YR 2.87%
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
GBPUSD TECHS: Trend Outlook Remains Bullish
- RES 4: 1.3550 High Feb 24 ‘22
- RES 3: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 2: 1.3402/3444 High May 6 / High Apr 28 / 29 and the bull trigger
- RES 1: 1.3360 High May 14
- PRICE: 1.3305 @ 06:11 BST May 19
- SUP 1: 1.3140 Low May 12
- SUP 2: 1.3110 50-day EMA
- SUP 3: 1.3041 Low Apr 14
- SUP 4: 1.2968 Low Apr 11
Recent weakness in GBPUSD appears corrective. The May 13 bounce highlights a possible reversal pattern - a bullish engulfing candle. The pattern remains valid and if correct, signals the end of the recent corrective cycle and a resumption of the uptrend. Key support to watch is 1.3117, the 50-day EMA. A continuation higher would refocus attention on the key resistance and a bull trigger, at 1.3444, the Apr 28 / 29 high.
BOBL TECHS: (M5) Recovers From Recent Lows
- RES 4: 119.960 High Apr 7 and the bull trigger
- RES 3: 119.780 High Apr 22
- RES 2: 119.600 High May 7
- RES 1: 118.858/118.950 20-day EMA / High May 12
- PRICE: 118.620 @ 05:52 BST May 19
- SUP 1: 118.060 Low May 14 and 15 and the bear trigger
- SUP 2: 117.680 Low Apr 9 and a key support
- SUP 3: 117.600 Low Mar 28
- SUP 4: 117.410 Low Mar 27
A bearish corrective phase in Bobl futures remains intact, however, the recovery from last week’s low does signal a possible reversal and the end of the corrective cycle. A continuation higher would open 118.950, the May 12 high. Clearance of this level would strengthen a bullish theme. On the downside, a resumption of weakness would expose 117.680, the Apr 9 low and a key support. The bear trigger is 118.060, the May 14 / 15 low.
AUSSIE BONDS: Cheaper Ahead Of RBA Policy Decision Tomorrow
ACGBs (YM -4.0 & XM -6.0) are cheaper on a data-light Sydney session.
- Cash US tsys have twist-steepened in today's Asia-Pac session, with yields 1bp lower to 4bps higher, as the market continued to digest late Friday news that Moody's Ratings downgraded the US credit score.
- (Bloomberg) -- “Goldman Sachs interest-rate strategists raise their year-end Treasury yield forecasts following a larger-than-expected reduction in US-China tariffs.”
- “US House panel approves Trump tax cut bill, setting up a possible vote on passage this week” - [RTRS]
- Cash ACGBs are 4-6bps cheaper with the AU-US 10-year yield differential at flat.
- The bills strip has bear-steepened, with pricing -2 to -6.
- Tomorrow, the local calendar will see the RBA Policy Decision, with the market expecting a 25bp cut to 3.85%.
- RBA-dated OIS pricing is flat to 4bps firmer across meetings today. A 25bp rate cut in May is given a 95% probability, with a cumulative 75bps of easing priced by year-end. Notably, today’s moves leave meetings pricing 4-44bps firmer than levels before the release of Q1 CPI data on April 30.
- The AOFM plans to sell A$1200mn of the 4.25% 21 December 2035 bond on Wednesday and A$800mn of the 2.75% 21 November 2028 bond on Friday.
