In-depth: Global market wrap-up

In-depth: Global market wrap-up


and it’s time now for an in-depth look
at the global markets this afternoon and for that I’m joined on the line by mr.
Daniel you global strategist and you want to securities mister you thank you
for coming on Thank You Barney well new doubts have been raised about
the us-china trade deal allegedly struck last Friday China says it wants another
round of talks before it signs yesterday’s stocks were down slightly on
Wall Street what’s the story here yes as you heard according to the Donald
Trump the first phase was done and the signing the document would take about
next three to five weeks so obviously it’s going to take quite some time so
because of that I think that these kind of news will be hitting the market
because of that long period the China seems to say that they want to they want
another round of talks before signing the first base one it is unclear exactly
what they really need to talk about but one factor is that scrapping of all the
terabytes scheduled for December I think that we we believe that that will be
most likely happen but nevertheless the Chinese market has shown some correction
today Shenzhen is down about one percent the Shanghai is down about a half
percent or so but we think that the needs or the deal is most likely by both
countries and the first place will include some part of intellectual
property rights technology and financial market opening and also purchase of 40
to 50 billion won worth of agricultural goods and pork from us by China so all
that will be most likely to be signed next three to five weeks just that
because it’s going to take some time people will be quite curious of exactly
what will be in the document yeah we’ll have to wait and see about that but in
the meantime it would seem that us-china trade is having an effect on the
exchange rates here in Korea the wons gained back a lot of strength against
the dollar almost back down to 1180 what do you see happening in the days
weeks months to come right as you said Korean Won has appreciated to 1185 level
the peak was called 23 so that’s quite a significant appreciation since last
several months so what that means is that clearly the direction of the US and
China trade talk is going in the right direction and that China will absorb or
import more goods from overseas that should be the positive news for Korea
clearly Korea suffered quite significant amount of that export slowing
significantly to the China due to these trade talk that’s happening and he kind
of exploded on that you’re saying and Chinese government is kind of allowing
local entities to increase the market share rather than the four entities who
are entering China but obviously with appreciation one it’s showing the
signals that maybe the China will pick up in terms of the input cuts and that
clear might benefit from that process we believe that the Korean Won depreciation
was overdone before when he hit 12 23 level we think the more reasonable
exchange rate is somewhere between 1152 in 1180
basis on the level of economic strength and overall comparison between Korea
China and us and we do think that as the roll rates I expected from US side that
October 30th may be another great cut is likely if that’s the case then dollar
will probably moderately weaken further which will result into further
appreciation of Korean Won while staying with that theme the currency and
interest rates the Bank of Korea going to decide tomorrow on rates what does
the market think will happen and will that be a big factor in stocks as well
sure because the current CD rates in Korea is about 1.5 5% the ko rates are
one point by three three years carbon bond rates at 1.3 so
these numbers are indicating that maybe the rate cut is not going to happen this
month given that the one appreciation
happening also the u.s. rate card versus now the Korea’s rate will be pretty much
similar that’s why I think if you’re anticipating the further appreciation of
one but would like to see if further rate cuts by B okay
given the fact that there’s continuation of slowdown in terms of the facility
investment that’s happening in Korea we need to see tables to invest more and
have a lower interest rate environment in order to boost economic growth rates
a lot of people are saying that Korea can achieve two percent growth rate
based on current intrinsic value but we think that the lot of activities is
slowing down because the sentiments quite poor we do think that the
government needs to be much more aggressive in terms of fiscal and
monetary policy in order to pump up the economy growth rates we do think though
2% growth rate is very achievable by the Korean government and Korean economy all
right got it mister you thank you that’s where we’ll have to leave it today we
appreciate your insights as always very much

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