- The leading month contact, KQ203 moved up and down in a relatively narrow range this week compared to the previous weeks.
- Against the previous week's weakness, the KOFEX fixed income market exhibited a strong upward trend this week.
- The USD/KRW rate showed an upward movement even if the Seoul bourse ended higher this week keeping a steady upward trend.
KOSDAQ50 Index Futures Market
During the week, in the KOSDAQ50 futures market, the leading month contact KQ203 moved up and down in a relatively narrow range compared to the previous weeks in a tug of war between several market strength factors such as the news that the end of the ongoing negotiation between cash strapped Hynix Semiconductors and Micron Technology is near and the huge amount of net purchasing by institutional and individual investors totaling up to KRW 1,314 billion and 4,236 billion this week and several market weakness factors such as the continued weakness of NASDAQ falling by 80.66 points or 4.46 percent at 1724.54 points this Friday on continuing accounting concern while the Dow increasing 0.65 percent this week and a correction in the local stock markets.
Accordingly, the KQ203 gained 1.95 points or 1.87 percent during the week moving in a band of 104.20 points to 106.00 points.
Korea Treasury bond Futures Market
Against the previous week's weakness, the KOFEX fixed income market exhibited a strong upward trend this week.
In spite of the several market unfriendly factors such as a growing hope for an early recovery of the domestic economy amid the rumored credit rating hike by Moody's and the announcement of consumer sentiment index (CSI), the broadest gauge measuring the outlook for consumer spending over the next six months, rising to 106.7 in January up from 100.9 in December, the lead month contact KTB203 gained four straight days in a row from Monday to Thursday.
Particularly, the CSI figure represented the highest-ever level since the statistical office began to compile the data in 1998 marking a rise for four consecutive months. In short, the KTB203 increased by 55 ticks during the week and finally it reached at 104.55 on Friday.
The major reasons for the strength are as follows:
- Corrections in domestic stock markets in response to the previous week's gains
- Successful 5-yr KTB auction on Monday thanks to the ample liquidity selling KRW 900 billion at 6.74 percent
USD/KRW Currency Futures Market
This week, in the KOFEX and cash F/X market, the prices of USD/KRW showed an upward movement even if the Korean stock markets kept their steady upward trend this week. However, the rates were still imprisoned in narrow bands. Particularly the cash USD/KRW rate has been fluctuated in a band of KRW 1,310 to KRW 1,325 since the beginning of January.
At KOFEX the current month contract USD203 gained KRW 6.0 during the week and it reached at KRW 1,324.1 per USD while the cash USD/KRW rate increased KRW 6.8 during the week closing at KRW 1,322.0 on Friday.
The major reasons for the weakness of the Korean Won are as follows:
- Five consecutive days' net selling by foreign investors in the Seoul bourse totaling KRW 588.4 billion in a week while the institutional and individual investors bought
- Continued weakness of the JPY after the US/Japan summit in Tokyo this week hinting the JPY's devaluation
