SOUTH KOREA: Risks Stemming from BOK Bias Tomorrow

September customs export growth was significantly stronger than Bloomberg consensus expected rising 19.0% y/y after 5.8%, highest since March 2022. While imports were also higher up 17.2% y/y following 15.8%, the pickup in shipments was enough to return the merchandise trade balance to surplus at $1275mn after August’s deficit of $1964mn. The Bank of Thailand expects slower exports in H2 to be a drive of slower GDP growth. The full goods trade data are released Friday.

• The smoother 3-month average rates of import and export growth were in line with the recent trend.

Thailand customs trade y/y% 3-month moving average

• 19% US import duties don’t appear to have impacted exports yet with shipments to the US up 35% y/y in September driven by telecoms & tech-related items.
• Thai imports from China have been elevated in 2025 running at over 22% y/y on average and so some of this growth to the US may reflect a channelling of goods through Thailand to avoid higher tariffs, especially as Thai domestic demand has been soft. In its agreement with the US, Thailand said it would work to prevent this redirection.
• The Ministry of Commerce noted that the strong export result was due to strong demand from Thailand’s major destinations and less global uncertainty following US trade deals across the globe. 

Broader USD index levels are little changed with the focus in crosses, particularly in terms of the yen, due to risk on induced by positive weekend US-China trade talks. The BBDXY index was last near 1213.20. USD/JPY is looking to consolidate its break above 153.00, while higher beta plays like AUD are outperforming (albeit away from session highs versus the USD). Cross asset sentiment has seen US equity futures surge, while US Tsy yields are also higher, so playing into a weaker yen trend.  

• The headlines that emerged from the weekend trade talks between the US and China, point to broad agreements in key areas, with the US side focused on rare earths and soybean purchases (while US Tsy Bessent stated that a 100% tariff rate risk was effectively off the table). A China official noted that a preliminary consensus had been reached on topics around export controls, fentanyl and shipping levies (per BBG).
• More details may emerge on Thursday (in terms of what exactly has been agreed to and on what time frame), when US President Trump and China President XI are expected to meet in South Korea and ratify an agreement. For now though markets are happy to trade risk on.  
• USD/JPY sits close to session highs, last near 153.10/15, with the bull trigger of 153.27, the Oct 10 high, nearby. Japan officials noted they were monitoring FX markets (for disorderly moves), but the remarks didn't suggest intervention risks were more heightened.
• AUD/JPY got above 100.00 earlier but found selling interest, while AUD/USD couldn't sustained an earlier break above the 50-day EMA (highs at 0.6547, last near 0.6530). We do have a RBA Bullock Fireside chat later, early evening Australian time.
• NZD/USD got to fresh highs of 0.5788, but is now 0.5755/60, but the technical bias still looks positive from earlier Oct lows.
• Later October Dallas Fed manufacturing and October German Ifo survey are released. The ECB’s Elderson and Tuominen speak.