SOUTH KOREA: Defence Ministry Seeks Talks w/North Amid MDL Incursions
The South Korean Ministry of National Defence has formally proposed the first inter-Korean talks under the presidency of Lee Jae-myung as Seoul seeks to set a 'baseline' for the Military Demarcation Line (MDL) within the Demilitarised Zone (DMZ) between the two countries. Yonhap quotes Kim Hong-chul, Director of the Defense Policy Office at the Ministry of National Defense, saying that during recent installations of land mines and barbed wire in the DMZ, "some [North Korean] personnel are continuously crossing the Military Demarcation Line and invading our area. Our military is taking measures to force the North Korean military to retreat north of the Military Demarcation Line through warning broadcasts and warning shots in accordance with operational procedures."
- Kim went on to warn that "tensions within the Demilitarised Zone are rising, and there are concerns that this could lead to military clashes between the South and the North."
- Regarding the offer of talks, Kim claimed, "We expect a positive and swift response from the North to our proposals to ease tensions on the Korean Peninsula and restore military trust." The last inter-Korean meeting at the general level took place in October 2018.
- President Lee, hailing from the liberal Democratic Party of Korea, is viewed as supportive of the 'sunshine policy' of the late President Kim Dae-jung, who advocated dialogue with the North rather than the more confrontational stance often pursued by conservative presidents.
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LOOK AHEAD: US Week Ahead Headlined By Delayed CPI Report On Friday
- The September US CPI report will be released on Friday, delayed amidst the government shutdown but with the BLS making a special exception on social security payment considerations.
- Bloomberg consensus looks for headline CPI inflation at a rounded 0.4% M/M after 0.38% back in August and for Y/Y inflation to firm two tenths to 3.1% for what would be its highest since May 2024.
- Core inflation is seen at a rounded 0.3% M/M after 0.35% in August (exceeding the median unrounded estimate of 0.31%) and 0.32% in July. It’s expected to see core CPI inflation hold at 3.1% Y/Y having in August increased to its highest since February.
- Core details should see focus on both goods and services angles: underlying goods inflation has clearly firmed in recent months on tariff pressures although the median increase has currently seen a peak back in June, whilst services will be watched for any spillover after some strong recent non-housing readings.
- The report will come within the FOMC blackout period ahead of the Oct 28-29 decision, with a 25bp cut fully priced and likely needing a large surprise to alter this.
- As for broader inflation details, Fed Chair Powell this week confusingly suggested that we will have the September PPI report but the BLS had previously said “No other releases will be rescheduled or produced until the resumption of regular government services”.
US DATA: Latest Jobless Claims Estimates During The Shutdown
As noted earlier, MNI estimates initial jobless claims at a seasonally adjusted 218k in the week to Oct 11 and continuing claims at a seasonally adjusted 1929k in the week to Oct 4.
- To give a better idea of sensitivity around these estimates, which rely on estimates for some missing states, we note the below analyst estimates:
- Goldman Sachs have a central estimate of 217k for initial claims in a range of 211-225k, whilst they see continuing claims at 1917k in a range of 1885-1930k.
- JPMorgan meanwhile also see 217k for initial claims whilst they see continuing claims as having held constant at 1927k.
NATGAS: Venture Global in Talks with Ukraine for more LNG Deliveries, Reuters
Ukraine is seeking more cargoes from Venture’s Plaquemines facility as the embattled nation approaches the winter heating season, according to Reuters sources
- Venture is in talks with Ukraine’s DTEK to procure more LNG cargoes after a year of gas infrastructure attacks by the Russians.
- Venture Global CEO Michael Sabel met with President Volodymyr Zelenskiy on Thursday October 16.
- DTEK signed an agreement in 2024 for an undisclosed amount of LNG from the facility, as well as 2 mtpa from Calcasieu Pass Phase 2 currently under construction.
- Plaquemines currently has spare capacity to deliver more cargoes to Ukraine on the spot market, per Reuters.
- Plaquemines now sends out the second highest LNG volume in the US, with feedgas demand averaging 3.45 bcf/d according to MNI figures.
