11 Dec 2025

Korean Market (12th Dec. 2025)

Today’s Market Reality

Today’s market is fundamentally about rates, not growth.
Global investors are increasingly comfortable with a soft-landing scenario across the U.S. and Europe, while inflation continues to ease.
This environment favors markets with global earnings exposure rather than domestic-demand-driven stories — a key positive for Korea.

Many investors continue to discount Korea as a domestic-demand–constrained economy.
In reality, global capital is re-framing Korea as a high-beta play on AI infrastructure and global manufacturing recovery.
Recent KRW weakness is widely misinterpreted as a structural issue; it is more accurately explained by policy timing and conservative central-bank positioning, not deteriorating fundamentals.

United States:
- This week’s U.S. inflation data came in softer than expected, reinforcing the soft-landing narrative.
- The Fed held rates steady and acknowledged cooling labor momentum, keeping the door open for early-2026 rate cuts.
- U.S. 10-year Treasury yields moved back toward cycle lows, supporting global equities and EM flows.
G2 (U.S.–China):
- Trump transition officials reiterated plans to expand tariffs and tighten AI and semiconductor export controls on China.
- Short-term FX volatility in CNY and KRW has increased, but the longer-term implication is accelerated supply-chain diversification.

Foreign investors are increasingly viewing Korea not as an EM trade, but as part of the global AI and advanced manufacturing supply chain.
Semiconductor names — particularly AI memory — remain the focal point as data-center investment cycles extend into 2026.
Domestic indicators (PMIs, consumption) remain uneven, but global investors are prioritizing export earnings visibility over local macro softness.

If these conditions hold, Korea remains a market to buy on pullbacks rather than fade.

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