KRW: Spot Won Gains On Tuesday, U/E Rate Spikes, Second Arrest Attempt For Yoon
Spot USD/KRW ended extended Tuesday trade at 1461.25, a won gain of 0.45%. This was in line with broader US index losses, with the BBDXY falling 0.44% for Tuesday's session (the DXY fell by more, off 0.70%, thanks to the EUR bounce). More broadly, spot won remains within recent ranges. The 20-day EMA continues to track higher, last at 1454.61. On the topside though, moves towards 1475 have drawn selling interest.
• Focus will be on National Pension Service strategic hedging flows, which have reportedly entered the market (per BBG). This a potential cap, at least to some degree, on upside USD/KRW momentum in the near term.
• On the data front, earlier data showed rise in both export and import prices for Dec. Import prices are now +7.0%y/y, up from negative territory at the end of Q3 last year.
• A little while ago we had the Dec job figures, which we weaker than expected. The unemployment rate spiked to 3.7% multi year highs, while jobs growth fell into negative y/y territory. Later on we get bank lending to households data.
• This comes ahead of tomorrow's BoK polciy meeting, where the sell-side consensus is for a 25bps cut. This fits with the domestic economy needing fresh policy support.
• The other onshore focus will be the authorities fresh attempt to arrest impeached President Yoon (which is unfolding at the moment) and whether that spills over into broader domestic unrest, which could impact local asset market sentiment. The authorities are likely to lean agaisnt such pressures in financial markets though.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
MNI: MNI JAPAN OCT CORE MACHINE ORDERS +2.1% M/M; SEPT -0.7%
- MNI JAPAN OCT CORE MACHINE ORDERS +2.1% M/M; SEPT -0.7%
- JAPAN OCT MACHINE ORDERS POSTS 1ST M/M RISE IN 4 MONTHS
BONDS: ACGB Curve Steepens, Chalmers To Speak On RBA Board Shortly
Aussie bonds are trading slightly cheaper this morning, largely tracking moves made in us tsys on Friday. Today is the last day for trading for the dec 3, 5 & 10yr bond futures, while earlier we had S&P Global flash PMIs, which came in below the prior months readings.
- Tsys futures fell again on Friday, ending one of the worst weeks for the year, tsys initially mirroring weak action in Bunds and Gilts in the first half of the US session, there was little in the way of data out on Friday with investors looking to position ahead of this weeks FOMC decision. Cash tsys curves bear-steepened, with yield closing 5 to 7.5bps higher.
- S&P Global Mfg PMI fell to 48.2, from 49.4 prior, while Services PMI dropped to 50.4 from 50.5, composite fell back below 50, to 49.9.
- Shortly we have Jim Chalmers speaking on the new look RBA board, with two members being replace. This will occur in the next 20 or so minutes
- Cash ACGBs are currently trading 2-3bps cheaper, with the curve bear-steepening. The 2yr is +2bps at 3.913%, while the 10yr is +2.7bps at 4.314%. Bonds Futures are lower today, with YM -1.4 & XM at -2.9
- The AU-US 10yr spread fell 5bps on Friday to -8bps
- Swap curves have flattened are are trading flat to -3bps, while the bill strip is flat to -2.
- There is nothing else on the calendar today
JGB TECHS: (H5) Shallow Correction
- RES 3: 149.55 - High Mar 22 (cont)
- RES 2: 147.74 - High Jan 15 and bull trigger (cont)
- RES 1: 144.48/146.53 - High Nov 11 / High Aug 6
- PRICE: 142.44 @ 16:13 GMT Dec 13
- SUP 1: 141.88 - 1.618 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 2: 141.56 - 1.764 proj of the Aug 6 - Sep 3 - 9 price swing
- SUP 3: 141.05 - 2.000 proj of the Aug 6 - Sep 3 - 9 price swing
JGB futures are trading above their recent lows and the latest shallow recovery appears to be a correction. Medium-term trend signals on the continuation chart continue to point south. A resumption of the trend would pave the way for a move towards 141.88 and 141.56, Fibonacci projection points on the continuation chart. A stronger recovery would open 144.48, the Nov 11 high. Further out, key resistance is at 146.53, the Aug 6 high (cont).
