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A screen shows the Kospi index and the exchange rate between the South Korean won and the U.S. dollar in a trading room at Hana Bank in Seoul, South Korea, Monday, Dec. 16, 2024.
SeongJoon Cho | Bloomberg | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
What you need to know today
All eyes on the US jobs report
The US non-farm payrolls report for December will be released later on Friday. Economists expect it to show an increase of 155,000 jobsdown from 227,000 in November, and the unemployment rate remained unchanged at 4.2%. Analysts from Goldman Sachs and Citigrouphowever, think both numbers will be worse than the consensus forecast.
American markets dark, European markets close higher
American markets were closed on Thursday in honor of former US President Jimmy Carter, who died at the end of December at the age of 100. regional of Europe Stoxx 600 index added 0.42% later I started the day in negative territory. Denmark’s Moller-Maersk fell 5.8% amid a broader sell-off in shipping stocks after a tentative work deal it was blocked by the American porters.
Fed governor thinks December cut should be ‘final step’
The Governor of the Federal Reserve of the United States, Michelle Bowman, said that the Fed December interest rates it should be his “final step in the policy recalibration phase.” This suggests that Bowman, who is a voting member of the Federal Open Market Committee, could oppose more cuts this year. Other Fed officials who spoke this week were more optimistic about lowering rates.
Ubisoft explores ‘strategic and capital options’
French video game publisher Ubisoft said on Thursday that he had been appointed “senior advisers”. review options “to extract the best value for stakeholders”. The founding family of Ubisoft Guillemot and Tencent were reported in October to be considered a recovery of the company. With the shares of Ubisoft at the minimum of 10 years, the company he asks questions about his future.
[PRO] Sweet spot for the employment report
The US economy is in a delicate position between growth and inflation. The employment report, out on Friday, demonstrates the difficulty of this balancing act. Too hot, and Treasury yields could rise; too cold, and fears of an economic slowdown could hold back stocks, Goldman Sachs said. But the S&P 500 could rally if the report comes in just the right range.
The background
South Korea can’t catch a break. In the past month, the country has been placed under martial law, had its sitting – and stand-in – president impeached, is on its second president in office (so far) and suffered a tragic plane crash.
How did these events affect the Korean market?
Going by the Kospi index: not much. The index, which tracks all common stocks listed on the Korea Stock Exchange, is now higher than it was on Dec. 3, when impeached President Yoon Suk Yeol declared martial law.
Its resilience can be traced to Korea’s political history and to the swift — and perhaps fortuitous — actions of the Bank of Korea.
Yoon and Han Duck-soo are just the latest two presidential figures to be impeached in Korean history. Before them, Roh Moo-hyun was impeached in 2004 (although the court overturned it), while Park Geun-hye was impeached in 2016 and removed from office the following year.
“Presidential impeachments are not unprecedented in Korea, and the actions of the country, at least, in the end, went quite well during the last one in 2016/2017,” Thomas Mathews, head of markets for Asia Pacific in Capital Economics. he said.
The uncertainties caused by the last two impeachments of Korea “have subsided in three to six months”, Soohyung Lee, a member of the Monetary Policy Council at the Bank of Korea, he told CNBC on January 2, so “it is possible that the political turmoil may not take as much as the economy of the country”.
Bank of Korea actions also seemed to calm the markets.
On the day Yoon lifted martial law, the BOK announced emergency measures to calm the markets and prevents volatility. Likewise, a Surprise 25 basis point rate cut by the BOK at its November meeting, enacted before Yoon declared martial law in December, could have softened the blow.
Internal factors may not be the biggest threat to the Korean economy and markets in the year ahead. U downside risks US President-elect Donald Trump’s tariffs are more worrisome, especially for an export-led country like Korea, Lee said.
Korea’s recent problems show that when one branch of government fails, other institutions can still support a country and its economy – but it is much more difficult to deal with other governments.
— CNBC’s Lim Hui Jie and Lee Ying Shan contributed to this report.
