SOUTH KOREA: Country Wrap: Korean Cos to Invest in US
- South Korea is set to unveil about $150 billion in US investment plans by private companies during a summit between President Lee Jae Myung and US President Donald Trump, the Hankyoreh newspaper reported Thursday. The pledge is likely to include both ongoing and future projects and will be separate from the $350 billion South Korea agreed to invest in the US as part of a trade agreement struck last month. While the $150 billion package will be highlighted at the summit, officials don’t expect further discussion of the $350 billion investment fund, which was a centerpiece of last month’s trade agreement, the newspaper said, citing unidentified government officials. The trade agreement between the two countries reached in July capped US tariffs on imports of Korean goods at 15%, one of the most favorable rates. Lee is set to meet Trump on Aug. 25 (source BBG)
- South Korea to roll out a 45.8t won support package this year to bolster supply chain resilience, combining low-interest financing and public-private funds to target at key industries such as batteries, semiconductors and critical minerals, according to a government statement. Govt to provide a total of 45.8t won in low-interest policy financing, which is composed of 10t won from the Supply Chain Stabilization Fund, 13.3t won from Export-Import Bank of Korea, 18t won from Korea Development Bank and 4.5t won from Industrial Bank of Korea. Additionally, 2 public-private investment vehicles will be launched: a 1.8t won fund, focusing on leading firms, and a 600b won fund aimed at SMEs and mid-sized companies in materials, parts and equipment. The measures will prioritize sectors deemed vital to economic security, including batteries, chips, critical minerals, energy, pharmaceuticals and biotech, as well as logistics infrastructure. (source BBG)
- The KOSPI snapped three days of losses to bounce back +0.48% today.
- The Won is losing ground by -0.15% to 1,398.78 with the move taking it through the 200-day EMA .
- Bonds are modestly better today with the 10yr 0.5bps lower at 2.86%
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Historical bullets
SCHATZ TECHS: (U5) Resistance Is Intact For Now
- RES 4: 107.475 High May 27
- RES 3: 107.430 High Jun 13
- RES 2: 107.365 High Jun 7 and key short-term resistance
- RES 1: 107.335 High Jul 16
- PRICE: 107.325 @ 06:14 BST Jul 22
- SUP 1: 107.200/120 Low Jul 15 and 16 / Low Jul 11 and bear trigger
- SUP 2: 107.112 1.236 proj of the May 23 - 29 - 30 price swing
- SUP 3: 107.000 Round number support
- SUP 4: 106.890 2.000 proj of the May 23 - 29 - 30 price swing
Schatz futures traded higher Monday, extending the recovery that started on Jul 11. Trend indicators continue to highlight a bear cycle and if correct, this suggests that short-term gains are corrective. Resistance to watch is 107.365, the Jun 7 high. A break would strengthen a bull theme. On the downside, a resumption of weakness would refocus attention on 107.120, the Jul 11 low and bear trigger.
US TSY FLOWS: BUY TUU5
BUY 4180 of TUU5 traded at 103-23 1/8, post-time 15:10:48 AEST (DV01 $156,378). The contract is currently trading at 103-22 3/4, -0-00 1/4+ from closing levels.
GBPUSD: Monitoring Resistance At The 20-Day EMA
- RES 4: 1.3835 High Oct 20 2021
- RES 3: 1.3681/3789 High Jul 04 / 01 and the bull trigger
- RES 2: 1.3620 High Jul 10
- RES 1: 1.3517 20-day EMA
- PRICE: 1.3472 @ 06:23 BST Jul 22
- SUP 1: 1.3365 Low Jul 16 and the short-term bear trigger
- SUP 2: 1.3335 Low May 20
- SUP 3: 1.3245 Low May 19
- SUP 4: 1.3144 38.2% retracement of the Jan 13 - Jul 1 bull cycle
GBPUSD continues to trade above its recent lows. For now, short-term gains appear corrective and a bear threat remains present. Recent weakness resulted in a break of trendline support currently at 1.3480 - drawn from the Jan 13 low. The breach strengthens a bear theme, exposing 1.3335 next, the May 20 low. Initial firm resistance to watch is 1.3517, the 20-day EMA. A clear break of this average is required to highlight a potential base.
