Korea – buying a bit more time
The BOK today sounded confident that core is coming down, but argued that headline is more uncertain. Of course, these two measures are different, but the distinction still feels disingenuous, and gives the impression that the bank is just trying to buy a bit more time.
Korea – activity still struggling
Business sentiment in Korea still isn't recovering. Exporter confidence has lifted, but continues to be offset by weakness among domestic firms. Price expectations in the consumer survey yesterday were probably still too high for the BOK's liking, but the probability of a BOK rate cut is growing
Korea – consumer confidence and price expectations sideways
Consumer confidence remains around the historical average, which is not strong enough to remove BOJ concern about the sluggishness of the domestic economy. However, the March survey doesn't give the bank the all-clear to act, with price expectations picking up for the second consecutive month.
Korea – talk of a "pivot"
The main takeaway from the BOK minutes for February was concern about the weakness of consumption. Inflation being above target means that policymakers don't feel able to react to that yet, but the bank is sounding more doveish, and will turn further in that direction if exports disappoint.
Korea – headline CPI up, details not
Inflation ticked up in February. That was expected by the BOK, and the details don't look particularly strong, with core stable, and trimmed mean continuing to fall. There is still an argument that inflation will be sticky, with personal services inflation remaining over 2%.
Korea – incrementally doveish again
The BOK's official stance didn't change in February. However, the tone today still became incrementally more doveish, with the governor revealing one member being open to a rate cut in the next few months.