SOUTH KOREA: Country Wrap: Unemployment Down in July
- South Korea’s adjusted unemployment rate fell to 2.5% in July, compared to 2.6% last month, according to Statistics Korea statement. Estimate at 2.6% (range 2.5% to 2.8%, 10 economists). 171,000 jobs were added in July from a year earlier. Labor force participation rate at 65% in July. Population over 15 years old increased 0.4% from a year ago (source BBG)
- President Lee Jae Myung on Wednesday raised the possibility of supporting an expansionary fiscal policy, calling for measures to improve the efficiency in government spending to boost economic growth. Lee voiced concerns over limited financial resources to push forward government initiatives during a meeting with financial officials and economic experts to discuss ways to improve efficiency in budget spending. "Although fiscal policy should serve as a catalyst for growth, tax revenues are decreasing. The slowdown in economic growth has reduced revenue, making national finances vulnerable," Lee said. (source Korea Times)
- After three consecutive days of losses, the KOSPI bounced today with gains of +0.79%
- The Won didn't participate in the regional rally today, left hovering around 1,383.45
- Bonds are seeing steeper curves with the 10yr at 2.82% (from yesterday's close of 2.80%)
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JGBS: Bear-Steepening As Upper House Elections Approach
JGB futures are sharply weaker and hovering near session lows, -46 compared to settlement levels.
- (Bloomberg) " The Bank of Japan finished selling millions of dollars of stocks it bought from besieged banks, ending a nearly two decade process. The BOJ's holdings of the shares purchased from banks hit zero as of July 10, falling from 2.5 billion 10 days ago, according to its balance sheet report."
- "JAPAN RULING BLOC MAY LOSE MAJORITY IN ELECTION: JNN ANALYSIS" – BBG
- Cash US tsys are slightly cheaper, with a steepening bias, in today's Asia-Pac session after Friday's bear-steepener.
- Cash JGBs are flat to 4bps cheaper across benchmarks, with the 20-year leading. The benchmark 10-year yield is 6.4bps higher at 2.578% versus the cycle high of 2.605%.
- Swap rates are flat to 6bps higher, with a steeper curve. Swap spreads are tighter out to the 20-year and wider beyond.
- Tomorrow, the local calendar will be empty apart from 5-year Climate Transition supply.
BUND TECHS: (U5) Bear Cycle Remains Intact
- RES 4: 131.95 High Jun 13 and the bull trigger
- RES 3: 131.33 High Jun 20
- RES 2: 130.76 High Jul 4
- RES 1: 130.10/130.56 High Jul 8 / 50-day EMA
- PRICE: 129.26 @ 05:50 BST Jul 14
- SUP 1: 129.12 Low Jul 11
- SUP 2: 128.97 Low May 14 and a reversal trigger
- SUP 3: 128.90 Low Apr 10
- SUP 4: 128.40 Low Apr 9
Bund futures traded lower last week, and a bear cycle remains intact. Friday’s extension resulted in a break of 129.30, the May 22 low. The breach strengthens the current bearish theme and exposes the next key support at 128.97, the May 14 low and a bear trigger. On the upside, resistance around the the 50-day EMA, at 130.36, marks the key short-term hurdle. A clear breach of it is required to highlight a possible reversal.
CRYPTO: Bitcoin Makes New Highs Through $120 000 As We Head Into Crypto Week
Bitcoin has had a range of $118 312.80 - $121 365.19 in the Asia- Pac session, it is currently trading around $121 280, +1.80%. Bitcoin is making new all time highs through $120 000 this morning as the market and institutional in particular seem to be getting ahead of what they perceive to be an important week for the industry.
- (Bloomberg) - ‘House Plans ‘Crypto Week’ to pass Stablecoin, Other Bills. House Republicans are turning their attention toward advancing President Trump’s cryptocurrency agenda as they seek to send landmark stablecoin legislation to the president’s desk and advance other digital currency legislation. The week of July 14 is set to be “Crypto Week.”
- Lance Roberts on X:“There has been a lot of talk about the demise of the dollar, even though it still comprises 58% of foreign reserves. However, one thing that could change that is the rise of stablecoins, where 99% of all stablecoins are pegged to the dollar. If the world goes digital, as expected, the dollar may be the dominant reserve."
- Andreas Steno Larsen - “Big week in relation to the legislative landscape for BTC/Crypto in the US next week and BTC is making a weekend breakout as we speak. ”
Fig 1 : Bitcoin Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
