SOUTH KOREA: Country Wrap: Holding Companies to Perform
Jun-05 05:23
- JPMorgan upgrades Korean holding companies Samsung C&T, SK Inc. and LG Corp. to overweight from neutral, citing expectations for improved corporate governance in the nation after Lee Jae-myung’s election victory. The Democratic Party is “preparing the commercial code revision sooner than initial expectations” and “we see a greater scale of revision (including presidential pledges) that could accelerate capital market reform and corporate governance structure improvement in Korea,” analysts including Jay Kwon write in a note (source BBG)
- South Korea's inflation fell below 2% in May for the first time in five months, increasing 1.9% from the same period last year, but the Bank of Korea warned of persistent risks, Yonhap News reported Wednesday. The South Korean central bank's deputy governor Kim Woong cited exchange rate volatility, global oil prices, and US tariff policies as key concerns, the report said. While inflation may edge up in June due to base effects, it is expected to ease into the 1% range in the second half, driven by weak demand and lower oil prices, it said. (source BBG)
- The KOSPI has now rallied three days straight and is up just over 1% today, and over 3% on election optimism.
- The Won was the best regional performer gaining +0.37% to 1,358.74
- Bonds rallied today after yesterday's record sell off. The long end was hit hard yesterday following a very weak auction. The 30yr finished higher in yield by +13bps yesterday and unsurprisingly has rallied today, lower by -3bps. KTB 10yr at 2.88%
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LOOK AHEAD: UK Timeline of Key Events (Times BST)
May-06 05:23
| Date | UK | Period | Event |
| 06-May | 0930 | Apr | S&P Global Services/Composite PMI (Final) |
| 07-May | 0930 | Apr | S&P Global/CIPS Construction PMI |
| 08-May | 1200 | --- | Bank Of England Interest Rate |
| 08-May | 1230 | --- | BOE Press Conference |
| 08-May | 1400 | Apr | Decision Maker Panel data |
| 09-May | 0940 | --- | BOE Bailey Keynote Address at Economic Conference |
| 09-May | 1215 | --- | BOE's Pill At National MPC Agency Briefing |
| 12-May | 0900 | --- | BOE Lombardelli At BOE Bank Watcher's Conference |
| 12-May | 1130 | --- | BOE Greene On Monetary policy outlook |
| 12-May | 1350 | --- | BOE Mann On Neutral Rate Of Interest |
| 12-May | 1530 | --- | DMO likely to publish FQ2 consultation agenda |
| 12-May | 1700 | --- | BOE Taylor Fireside Chat With Ed Balls |
| 13-May | 0001 | Apr | BRC-KPMG Shop Sales Monitor |
| 13-May | 0700 | Mar / Apr | Labour Market Survey |
| 14-May | 0815 | --- | BOE Breeden At ISDA Conference |
LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
May-06 05:18
| Date | Time | Country | Event |
| 06-May | 0745 | FR | Industrial Production |
| 06-May | 0815 | ES | S&P Global Services/Composite PMI (f) |
| 06-May | 0845 | IT | S&P Global Services/Composite PMI (f) |
| 06-May | 0850 | FR | S&P Global Services/Composite PMI (f) |
| 06-May | 0855 | DE | S&P Global Services/Composite PMI (f) |
| 06-May | 0900 | EU | S&P Global Services/Composite PMI (f) |
| 06-May | 1000 | EU | PPI |
| 07-May | 0700 | DE | Manufacturing Orders |
| 07-May | 0745 | FR | Foreign Trade |
| 07-May | 0830 | EU | S&P Global Final Eurozone Construction PMI |
| 07-May | 0900 | IT | Retail Sales |
| 07-May | 1000 | EU | Retail Sales |
| 08-May | 0700 | DE | Trade Balance / Industrial Production |
| 08-May | 0800 | ES | Industrial Production |
OIL: Crude Unwinds Yesterday’s Losses On Technicals
May-06 05:17
Oil prices have recovered most of Monday’s losses today driven by technicals. Also Asia including China returned from holidays. WTI is up 1.7% to $58.07/bbl, close to the intraday high, to be down only 0.4% this week. Brent is 1.6% higher at $61.21/bbl and only down 0.1% since Friday. The USD index is off its intraday high to be up only 0.1%.
- Bloomberg is reporting that the 9-day relative strength index flashed oversold which drove today’s bounce in both WTI and Brent.
- After OPEC’s decision to increase output by over 400kbd from June following a similar rise in April, supply trends are going to remain firmly in focus. Saudi Arabia warned that there could be further rises if its members don’t stick to their quotas. Iraq and Kazakhstan have been constant overproducers.
- Later today US industry-based inventory data are released, which will give an insight into demand/supply trends there ahead of the official data on Wednesday.
- Later US March trade data are released as well as Canadian trade & PMI and European services/composite PMIs for April.
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