Short comment
Right before, BOK lowered their prediction for GDP growth during this year, from 3% to 2.9%.
I think the perspective still looks like too positive considering global IBs think ceiling point for GDP growth already passed.
The percentage reflects expectaions from local researchers - 2.8% in Hyundai and LG, 2.9% in KDI.
BOK estimates corporate investment is weak, but consumption and export are having firm upside-trend.
Unlike counterparts from other EMs, BOK is showing strong confidence, and I believe it's fully grounded.
Even though it didn't raise benchmark rate in this time, there could be rise in near future.
The rising USDKRW and yields of government bonds are reflecting the probability.
But unlike Turkey Indonesia where the institutions raise benchmark rates with outflow of foreign investors, Korean institution will do it based on judgement for well-grounded real economy.
In now, I agree with that.
But financial markets are going through huge volatilites.
While the highest unemployment in youth generation - right after graduate - isn't big problem, proceeding trade war between US and the rest of the world and worry for EMs are still proceeding issues in the markets.
There would be one rise in benchmark rate in this year, but it will be no big deal considering foreigners' movement.
In this point, my suggestions for near future are like below.
Bullish stock market and USDKRW with the higher volatilities and limited bearish FI matket which reflect volatility in the other markets.
Right before, BOK lowered their prediction for GDP growth during this year, from 3% to 2.9%.
I think the perspective still looks like too positive considering global IBs think ceiling point for GDP growth already passed.
The percentage reflects expectaions from local researchers - 2.8% in Hyundai and LG, 2.9% in KDI.
BOK estimates corporate investment is weak, but consumption and export are having firm upside-trend.
Unlike counterparts from other EMs, BOK is showing strong confidence, and I believe it's fully grounded.
Even though it didn't raise benchmark rate in this time, there could be rise in near future.
The rising USDKRW and yields of government bonds are reflecting the probability.
But unlike Turkey Indonesia where the institutions raise benchmark rates with outflow of foreign investors, Korean institution will do it based on judgement for well-grounded real economy.
In now, I agree with that.
But financial markets are going through huge volatilites.
While the highest unemployment in youth generation - right after graduate - isn't big problem, proceeding trade war between US and the rest of the world and worry for EMs are still proceeding issues in the markets.
There would be one rise in benchmark rate in this year, but it will be no big deal considering foreigners' movement.
In this point, my suggestions for near future are like below.
Bullish stock market and USDKRW with the higher volatilities and limited bearish FI matket which reflect volatility in the other markets.
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