SOUTH KOREA: Country Wrap: Korean's to Vote
- Korean markets were closed today due to the presidential election. If you haven't already seen it, take a look at the excellent piece from our political risk team.
https://my.mnimarkets.com/article/17efcc2c-fd8d-4f27-9492-6ccccff910a2-1748602114087
- Yonhap reporting that interest in this election is strong. Five hours after the polls opened at 6 a.m., 18.3 percent, or some 8.1 million, of the 44.39 million eligible voters had cast their ballots at 14,295 polling stations, according to the National Election Commission (NEC). Voter interest was keen in the snap election, as 34.74 percent of the registered voters had already cast their ballots in the early voting held on Thursday and Friday, the second-highest figure since early voting was introduced in 2014. (source Yonhap)
https://en.yna.co.kr/view/AEN20250602004952315?section=national/politics
- Maeil Business Paper reporting that the Electoral Commission is saying that as at 1PM today, voter turn out for this election when compared to 1pm for the last is nearly 1% higher. (source MAEIL)
https://www.mk.co.kr/en/politics/11333304
- Korea's market have largely been in a positive mood ahead of the election. The markets have endured multiple shocks from the martial law through to impeachment for President Yoon to the dominant semi-conductor stocks melting down as tariffs were announced by the US. The KOSPI cratered -13% over the April announcement of tariffs yet has recovered since. From the 9 April low, the KOSPI is up +17.71% and at 2,698 sits above the 5-year average. During that same period 1Q GDP printed at -0.2% and the BOK cut rates. The Won over that time has had an equally volatile period. Around the time of the tariff announcement the Won was trading at 1,377 only to widen to 1,420 (representing a 3.10% decline) and then recover back to 1,377 today. Bonds have equally exhibited an increase in volatility over that time. KTB 3yr ended March at 2.57%, rallying to 2.25% and today is back at 2.35%. KTB 10yr ended March at 2.78%, rallying to 2.56% and is back now at 2.79%. (source MNI Market News)
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Historical bullets
USDCAD TECHS: Hits Bear Trigger, New Cycle Low
- RES 4: 1.4415 High Apr 1
- RES 3: 1.4296 High Apr 7
- RES 2: 1.4087 50-day EMA
- RES 1: 1.3906/3935 High Apr 17 / 20-day EMA
- PRICE: 1.3793 @ 17:00 BST May 2
- SUP 1: 1.3760 Low Apr 21 and the bear trigger
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
The trend set-up in USDCAD deteriorated further Friday, with prices slipping through the bear trigger to narrow the gap with next support. The fresh cycle low reinforces the bear cycle and signals scope for a continuation near-term. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Moving average studies are in a bear mode position, highlighting a dominant downtrend. First resistance to watch is 1.3943, the 20-day EMA.
AUDUSD TECHS: Consolidation Phase
- RES 4: 0.6550 61.8% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6528 High Nov 29 ‘24
- RES 2: 0.6471 High Dec 9 ‘24
- RES 1: 0.6470 High May 2
- PRICE: 0.6445 @ 16:59 BST May 2
- SUP 1: 0.6344/6316 Low Apr 24 / 50-day EMA
- SUP 2: 0.6181 Low Apr 11
- SUP 3: 0.6116 Low Apr 10
- SUP 4: 0.5915 Low Apr 9 and key support
AUDUSD remains inside a consolidation phase, having traded either side of the 0.6400 level for 10 consecutive sessions. The underlying trend remains bullish and the pair is trading close to recent highs. Price has recently breached a key resistance at 0.6409, the Dec 9 ‘24 high. This breach reinforces bullish conditions and signals scope for a continuation higher near-term. Sights are on 0.6471 next, the Dec 9 2024 high. Initial key support to monitor is 0.6316, the 50-day EMA. A clear break of this EMA would be a concern for bulls.
US TSYS: Rates Retreat, Sentiment Improved Though Trade Risk Remains
- Treasuries look to finish near late Friday session lows after trading firmer on the open, higher than expected Nonfarm payrolls at 177k (sa, cons 138k) of which private contributed 167k (sa, cons 125k) triggered the early reversal.
- However, two-month revisions of -58k offset the 39k beat for nonfarm payrolls, with a similar story for private (a 42k surprise vs -48k two-month revision).
- Stocks are back near four week highs - pre-"Liberation Day" levels as hopes of some trade deal being made improved sentiment.
- The Wall Street Journal reports that "Beijing is considering ways to address the Trump administration’s gripes over China’s role in the fentanyl trade... potentially offering an off-ramp from hostilities to allow for trade talks to start." The Journal notes that "discussions remain fluid" and China "would like to see some softening of stance from President Trump".
- Currently, the Jun'25 10Y contract trades -20 at 111-07.5 vs 111-02 low -- initial technical support (50-dma) followed by 110-16.5/109-08 (Low Apr 22 / 11 and the bear trigger). Curves bear flattened, 2s10s -3.480 at 48.002, 5s30s -4.911 at 86.807.
