South Korea | After a weak Q1, the won should post modest gains
While we expect broad US dollar strength in the rest of 2021, we still see
modest gains in the Korean won (KRW) from current levels. This will come from a real yield advantage over the US, a positive export outlook, and valuations that don’t look stretched.
What you will learn from this report:
- We expect South Korea to retain a positive real yield spread over the US, supported by a higher policy rate than that in the US and a relatively contained inflation outlook.
- The three- and 10-year real yield spreads have remained well
over 1%, despite the rapid rise in US Treasuries over Q1.
- We expect South Korea’s exports to continue growing strongly, lifted by the global trade recovery and semiconductor demand.
BoJ to look through a temporary decline in monetary base
The Bank of Japan (BoJ) left monetary policy unchanged at today's (22nd Sep) meeting, maintaining current short- and long-term interest rates, despite another wave of yen weakening and upward pressures on JGB yields.Find Out More
Global: Worried businesses see almost 50% chance of recession
Businesses continue to downgrade their expectations for the global economy, based on our latest survey of risk perceptions. On average, respondents judge there's a 47% probability of a global recession over the next 12 months.Find Out More