04 Dec 2025

Korean Market (5th Dec. 2025)

1. Global Macro

Global markets trade higher as investors anticipate dovish forward guidance from major central banks in early 2026.
Global liquidity continues to recover: November M2 data in the U.S. and Eurozone shows broad improvement.
Asia’s export cycle is stabilizing, with Korea leading the recovery thanks to semiconductors and AI-related supply chains.
Commodity prices remain contained as demand slowly firms in Asia while global inflation decelerates.
Market volatility remains low ahead of key U.S. labor data.

The U.S. labor market continues to cool gradually. Today’s NFP remains the main catalyst for market direction.
Recent JOLTS and ADP data indicate weaker hiring momentum → reinforces the soft-landing narrative.
Markets still price the first Fed rate cut in Q1–Q2 2026, with the Fed holding a data-dependent stance.
Megacap tech outperforms on lower real-yield expectations, but small caps underperform due to slower domestic demand.
The USD remains on a mild weakening trend, supportive for Asian FX except KRW, which underperformed recently.

Trump’s transition discussions continue to highlight higher China tariffs, broader semiconductor export controls, and tighter AI-technology restrictions.
This raises regional FX volatility—KRW has closely tracked CNY swings.
While short-term uncertainty rises, long-term structural benefit grows for Korea’s semiconductor and advanced manufacturing sectors as global firms diversify out of China.

United States

Korea

Exports: November exports +8.4% YoY (6th month of expansion). Semiconductors +38.5% YoY — largest increase on record driven by AI-memory and data-center upgrades (Reuters / Ministry of Trade).
Trade Balance: +$9.7B in November — strongest since 2017; foreign investors increasingly view Korea as a beta-play on global IT recovery (Ministry of Trade).
Inflation: CPI +2.4% YoY — 3rd straight month above 2%; driven by food, oil, and earlier KRW weakness (Reuters / Korea Times).
Manufacturing PMI: 49.4 — still contractionary; exports strong but domestic demand and investment remain soft (Reuters).
FX (USD/KRW): ~1,472 (↑0.4%) — KRW underperformed peers due to weak domestic growth and cautious BOK stance. Near-term expected range: 1,450–1,500, with a slow move toward 1,420 over 12 months (Trading Economics consensus).

Korea enters December with a powerful export-led uplift: semiconductors, EV components, and AI hardware are driving the strongest trade numbers since 2017.
The semiconductor cycle continues to accelerate as global AI-server demand expands and U.S. export controls cap China’s ability to produce advanced chips.
Despite a large trade surplus, KRW remains weaker than regional peers due to cautious BOK policy and macro uncertainty.
With valuations elevated, sector selection remains key:
- AI / memory semiconductors
- EV & battery supply chain
- Industrial automation
- Financials benefiting from lower yields

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