SOUTH KOREA: Country Wrap: Fuel Tax Cut to be Extended
Aug-14 05:27
- Korea will extend its fuel tax cut for an additional two months through the end of October in a bid to ease the financial burden on consumers amid ongoing volatility in global oil prices, the finance ministry said Thursday. Under the latest extension, the current fuel tax reductions — a 10 percent cut on gasoline and a 15 percent cut on diesel and liquefied petroleum gas (LPG) — will remain in place for an additional two months through Oct. 31, according to the Ministry of Economy and Finance. (source Korea Times)
- South Korea's fiscal deficit reached over 94 trillion won (US$68.2 billion) in the first six months of the year, the finance ministry said Thursday. The managed fiscal balance, a key gauge of fiscal health calculated on stricter terms, posted a deficit of 94.3 trillion won in the cited period, according to data from the Ministry of Economy and Finance. While the reading represents an improvement from the over 100 trillion-won shortfall recorded during the same period last year, it marks the fourth-largest on record, according to the Ministry of Economy and Finance. (source Yonhap)
- South Korea's Kospi is down around 0.20%, HSBC downgraded local stocks to underweight (from neutral) citing valuations in certain sectors (per BBG). Some concerns around potential tax changes reportedly being considered by the government has been a headwind for stocks of late.
- The Won is the worst regional performer today falling -0.32% as regional peers all delivered gains.
- Bonds have had a decent rally with intermediates in 2-3bps. KTB 10 at 2.82%
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LOOK AHEAD: UK Timeline of Key Events (Times BST)
Jul-15 05:23
| Date | UK | Period | Event |
| 15-Jul | 2100 | Q1 | Mansion House: Chancellor Reeves and BOE Bailey |
| 16-Jul | 0700 | Q1 | Consumer inflation report |
| 17-Jul | 0700 | Q1 | Labour Market Survey |
| 22-Jul | 0700 | Q1 | Public Sector Finances |
| 23-Jul | 0001 | Q1 | Brightmine pay deals for whole economy |
| 24-Jul | 0930 | Q1 | S&P Global Flash PMI |
| 24-Jul | 1100 | Q1 | CBI Industrial Trends |
| 25-Jul | 0001 | Q1 | Gfk Monthly Consumer Confidence |
| 25-Jul | 0700 | Q1 | Retail Sales |
| 28-Jul | 1100 | Q1 | CBI Distributive Trades |
| 29-Jul | 0001 | Q1 | BRC Monthly Shop Price Index |
| 29-Jul | 0930 | Q1 | BOE Lending to Individuals M4 |
| 01-Aug | 0930 | Q1 | S&P Global/ CIPS UK Final Manufacturing PMI |
LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
Jul-15 05:18
| Date | Time | Country | Event |
| 15-Jul | 0800 | ES | HICP (f) |
| 15-Jul | 1000 | EU | Industrial Production |
| 15-Jul | 1000 | DE | ZEW Current Expectations Index |
| 16-Jul | 0900 | IT | HICP (f) |
| 16-Jul | 1000 | EU | Trade Balance |
| 17-Jul | 1000 | EU | HICP (f) |
| 17-Jul | ---- | EU | ECB Cipollone At G20 Meeting |
| 18-Jul | 0700 | DE | PPI |
| 18-Jul | 0900 | EU | EZ Current Account |
| 18-Jul | 1000 | EU | Construction Production |
| 18-Jul | ---- | EU | ECB Cipollone At G20 Meeting |
| 21-Jul | 1000 | EU | EZ Quarterly GDP Third Estimate |
| 22-Jul | 0900 | EU | ECB Bank Lending Survey |
| 23-Jul | 1500 | EU | Consumer Confidence Indicator (p) |
JGBS: Bear-Steeper But Off Cheapest Levels
Jul-15 05:16
JGB futures are weaker, -13 compared to settlement levels, but ranges have been narrow.
- Today, the local calendar will be empty apart from 5-year Climate Transition supply.
- Cash US tsys are little changed in today’s Asia-Pac session. Focus is on today’s June CPI inflation data and several Fed speakers ahead of Friday evening's policy blackout.
- Cash JGBs are flat to 7bps cheaper across benchmarks, with a steeper curve. The benchmark 10-year yield is 0.7bp higher at 1.589% after revisiting the cycle high of 1.596% earlier in the session.
- As Japan's upper house elections approach (held July 20), focus remains on the relentless rise in longer-dated JGB yields. The 30-year is up 1bp at 3.182% after hitting 3.219%. This is a fresh high on record (since it was debuted in 1999, per BBG). Concerns around fiscal slippage are a factor in the JGB sell-off. The 2/30yr JGB curve is at +240bps, just off multi-decade highs.
- Swap rates are ~1bp higher to 1bp lower, with a flatter curve. Swap spreads are mostly tighter.
- Tomorrow, the local calendar will be empty.
