Korean Market (3rd Dec. 2025)

Korea Market Brief

1. Global Macro

• Global markets remain firm as the early-December risk-on mood continues, supported by cooling inflation and improving liquidity.
• Major central banks maintain a consistent message: policy is restrictive enough, and rate cuts will be considered once disinflation is fully anchored — markets expect the first coordinated moves in early 2026.
• Global M2 liquidity expanded again in November, improving financial conditions for export-driven economies.
• Supply-chain indicators in Asia show stabilization, with manufacturing PMIs across Korea, Taiwan, and Southeast Asia beginning to rise.
• Commodities remain calm: oil trades in a tight range, while industrial metals gain modestly on better cyclical sentiment.

2. U.S. Economy

• Recent U.S. data continues to confirm the soft landing trajectory: job openings are normalizing, wage pressures easing, and consumer spending decelerating without a sharp drop.
• The Fed is expected to hold rates steady at the December FOMC, while markets are increasingly pricing the first rate cut around Q1–Q2 2026.
• U.S. equities show style divergence: megacap tech remains bid on falling yields, while small caps lag due to slower domestic demand.
• The U.S. dollar remains on a mild weakening trend, benefiting emerging-market FX including KRW.

3. Trump & G2

• Trump’s transition team continues signaling a more aggressive tariff framework toward China starting in 2026.
• Policy discussions highlight potential expansion of semiconductor, AI-related, and advanced manufacturing export controls.
• KRW volatility has increased modestly in tandem with CNY fluctuations.
• Long-term impact remains supportive for Korea’s high-tech industries as multinational supply chains diversify away from China.

4. Key Indicators (U.S. + Korea)

United States

• ISM Manufacturing: improving but still below 50
• Core PCE: easing toward 2.6–2.7%
• 10Y Treasury: holding near recent lows
• DXY: continuing its downward trend

Korea

• Exports: semiconductor shipments up strongly for the fourth consecutive month
• KOSPI Fwd P/E: elevated → requires selective sector positioning
• KRW: firming as USD weakens
• Korea 10Y yield: declining further, easing corporate funding conditions

5. Korea Macro & Equity Market

• Korea enters December with supportive macro conditions: improving global liquidity, encouraging U.S. data, G2 supply-chain realignment, and strong export momentum.
• The semiconductor cycle continues accelerating, boosted by AI-server demand and sustained U.S. restrictions on China’s advanced chip capabilities.
• Foreign inflows remain steady as KRW strengthens and U.S. yields drift lower.
• With the KOSPI’s valuation still elevated, sector selectivity remains key:
  • AI/memory semiconductors
  • EV & battery supply chain
  • Industrial automation
  • Financials benefiting from declining yields

(This content is not investment advice. Investors are responsible for their own decisions.)