SOUTH KOREA: Country Wrap: Industrial Production Rises in April
- South Korea's tax revenue rose by 16.6 trillion won (US$12.1 billion) in the first four months of this year from a year earlier, driven largely by a surge in corporate tax collection, the finance ministry said Friday. The government collected 142.2 trillion won in taxes during the January-April period, up from 125.6 trillion won in the same period last year, according to data from the Ministry of Economy and Finance. The increase was mainly attributed to higher corporate tax revenue, which amounted to 35.8 trillion won during the four-month period, up 57 percent from the same period the previous year. (source Yonhap)
- South Korea's Industrial Production YoY for April rises +4.9%, beating expectations of a rise in +4.0%. March's result however was revised down from +5.3% to +4.4%.
- The MoM figure was less than flattering with a decline of -0.9% following March's expansion of +2.9%. The Cyclical Leading Index rose +0.3% MoM. (source MNI and Korea Times)
- The KOSPI has had a strong week on the back of a cut from the Central Bank and is up +3.8%, yet down just over 1% today.
- The won is down today by -0.5% at 1,379.15 and 1% lower for the week.
- Bonds have had an up and down week and are ending up in line with where it started for the 10YR at 2.77%
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GBPUSD TECHS: Bullish Trend Structure
- RES 4: 1.3605 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 3: 1.3550 High Feb 24 ‘22
- RES 2: 1.3510 1.236 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 1: 1.3444 High Apr 28 / 29
- PRICE: 1.3391 @ 06:10 BST Apr 30
- SUP 1: 1.3280 Low Apr 28
- SUP 2: 1.3202 20-day EMA
- SUP 3: 1.3041/3002 Low Apr 14 / 50-day EMA
- SUP 4: 1.2807 Low Apr 10
The trend condition in GBPUSD remains bullish and Monday’s fresh cycle high reinforces current conditions. The move higher highlights a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Moving average studies are in a bull-mode position too, signalling a dominant uptrend. Sights are on 1.3510, a Fibonacci projection. Support to watch lies at 1.3202, the 20-day EMA.
BOBL TECHS: (M5) Trading Closer To Its Recent Highs
- RES 4: 120.20 High Dec 12 ‘24 (cont)
- RES 3: 120.000 Psychological round number
- RES 2: 119.960 High Apr 7 and the bull trigger
- RES 1: 119.780 High Apr 22
- PRICE: 119.400 @ 05:45 BST Apr 30
- SUP 1: 119.180 Low Apr 23
- SUP 2: 118.996 20-day EMA
- SUP 3: 118.060 Low Apr 10
- SUP 4: 117.680 Low Apr 9 and a key support
Bobl futures are trading closer to their recent highs and a bull cycle remains in play. The steep sell-off between Apr 7 - 9 is considered corrective. The early April rally resulted in a break of key resistance at 119.040, the Feb 28 high, strengthening bullish conditions. The focus is on the 120.000 handle next. Firm support lies at 117.680, the Apr 9 low. The 20-day EMA, an important short-term support, is at 118.996.
AUSSIE BONDS: Modestly Cheaper After CPI Beat, Chance 50bp Cut In May Gone
ACGBs (YM flat & XM +2.0) slightly mixed on the day but 1-4bps cheaper after today’s Q1 CPI data.
- Q1 headline and underlying inflation printed 0.1pp higher than expected but the trimmed mean at 2.9% y/y is below the top of the RBA’s 2-3% target band for the first time since Q4 2021.
- Cash US tsys are slightly mixed in today's Asia-Pac session.
- Cash ACGBs are flat to 2bps richer on the day, with the AU-US 10-year yield differential at flat.
- Swap rates are flat to 4bps lower, with the curve flatter.
- The bills strip has twist-flattened, with pricing -5 to +3.
- The data is close to the RBA’s expectations and at this stage consistent with inflation sustainably remaining within the band. Thus, another 25bp rate cut to 3.85% is likely on May 20, assuming that easing is consistent with the RBA’s updated outlook.
- RBA-dated OIS pricing is 2-5bps firmer across meetings after today’s data. A 50bp rate cut in May is given a 3% probability, with a cumulative 112bps of easing priced by year-end.
- Tomorrow, the local calendar will see CoreLogic Home Values, Trade Balance and Q1 Terms of Trade data.
- The AOFM plans to sell A$1200mn of the 2.75% 21 June 2035 bond on Friday.
