PMI Rises as Korea Awaits CPI Data

Market Snapshot

Asset	Level	Change
KOSPI	6,155.77	-6.67%
KOSDAQ	767.60	+6.65%
USD/KRW	1,428.38	-0.51%
Samsung	262,500.00	+26.81%
SK Hynix	1,718,000.00	+29.95%
Brent Crude	84.82	-5.88%
Gold	4,115.10	+1.63%
Bitcoin	63,752.16	+0.43%
Korea Short-term Rate	2.54%	+0.00%
Korea Long-term Rate	4.18%	+2.60%

Prior Economic Events

Data	Prior	Cons	Actual
S&P Global Manufacturing PMI Index	52.10	-	53.10

Today's Economic Events

Data	Prior	Cons	Time
Inflation Rate Year-over-Year	3.20	3	19:00

Manufacturing PMI rose to 53.1 from 52.1, signaling firmer factory momentum.
KOSPI fell 6.67 percent while Samsung and SK Hynix surged over 26 percent each.
USD/KRW eased 0.51 percent ahead of today's CPI release.

Yesterday's Recap

South Korea's S&P Global Manufacturing PMI Index climbed to 53.1 in July from 52.1 the prior month, pointing to continued expansion in factory activity. Equity markets diverged sharply, with the KOSPI dropping 6.67 percent to close at 6,155.77 while the KOSDAQ advanced 6.65 percent to 767.60. Semiconductor names led the KOSDAQ rally as Samsung Electronics shares jumped 26.81 percent to 262,500 won and SK Hynix gained 29.95 percent to 1,718,000 won.

The won strengthened modestly, with USD/KRW falling 0.51 percent to 1,428.38. Korea's short-term rate remained steady at 2.54 percent while the long-term rate rose 2.60 percent to 4.18 percent. Brent crude declined 5.88 percent to 84.82 dollars per barrel, offering some relief to import costs.

Gold advanced 1.63 percent to 4,115.10 dollars per ounce amid broader safe-haven demand.

The Day Ahead

Markets will focus on the August 3 release of Korea's inflation rate year-over-year, expected at 3.0 percent after 3.2 percent in June. The 19:00 ET print will provide the latest gauge of price pressures ahead of the next Bank of Korea policy meeting. Authorities have activated a severe heatwave warning system across Seoul and other regions, with temperatures exceeding 40 degrees Celsius for the fifth consecutive day, which may weigh on near-term consumption and construction activity.

Foreign tourist spending continued to surge in the first half of the year, supported by a rebound in Chinese visitors and strong medical tourism inflows. Property-tax proposals that raise levies on expensive homes while easing burdens for single owner-occupiers could influence household spending and housing-market sentiment. No major data releases are scheduled for August 4.

Other Economic Notes

Record heat is forcing authorities to urge residents to halt outdoor activities, raising risks to labor-intensive sectors and electricity demand. POSCO reported stronger second-quarter 2026 earnings despite soft steel prices, underscoring resilience in the industrial base. South Korea's shift away from a denuclearization-first policy toward North Korea introduces new geopolitical uncertainty that could affect regional supply chains and defense spending.

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Other Economic Notes (continued)

Medical-tourism receipts are expanding rapidly, adding a durable service-export channel that helps offset goods-trade volatility. Proposals to tighten property taxes on high-value homes aim to cool speculative demand while supporting owner-occupier stability.

Global Macro News

Federal Reserve speakers including Vice Chair Philip Jefferson and Governor Michelle Bowman highlighted the need to balance growth risks against persistent inflation, keeping markets alert to any shift in the Fed's dot plot. The Bank of Canada and Reserve Bank of Australia also released updated outlooks that emphasized supply-side pressures, reinforcing the global focus on core price trends. Hong Kong Monetary Authority and People's Bank of China officials discussed cross-border financial linkages, which remain relevant for Korea's export financing and won liquidity.

Asian semiconductor supply chains are drawing renewed attention after a British photonic-chip startup raised substantial funding, potentially altering long-term competition for Korean memory makers. Brent's decline offers Korea a modest terms-of-trade gain, though sustained weakness could pressure energy-related investment. Gold's advance signals ongoing hedging demand that often coincides with won volatility episodes.

BoK Watch

The Bank of Korea has held the base rate at 2.54 percent since June, balancing above-target inflation against softening external demand. June CPI stood at 3.16 percent year-over-year, leaving little room for near-term easing even as the upcoming print is expected to moderate to 3.0 percent. Minutes from recent meetings have stressed vigilance on second-round effects from wage and housing costs, with the committee underscoring data dependence rather than a preset easing path.

Financial-stability considerations remain prominent given elevated household debt and the recent rise in long-term yields to 4.18 percent. Forward guidance continues to highlight that any policy adjustment will hinge on sustained convergence of inflation toward the 2 percent target alongside stable growth. Markets are therefore pricing limited scope for cuts until the autumn data flow clarifies the trajectory of both prices and exports.

Korea Macro Daily(Beta Mode)