Trump warns of response to helicopter downing

1) USD-W1,510 won support
The local currency closed at 1,528 won against the U.S. dollar Tuesday night, flat against the previous day. It was once below 1,510 won due to a combination of currency caution, nego supplies and a rebound in local stock markets, but rose to 1,537 won amid low buying. Risk-reversal, an indicator of sentiment in the options market, has fallen for a second day, suggesting the won’s pressure is easing

2) Trump warns of response to helicopter downing
President Trump vowed to respond to the shooting down of a U.S. helicopter near Oman, blaming Iran. This came just hours after his remarks that an agreement on the situation in Iran was imminent. Although the ceasefire has been maintained for about two months, sporadic conflicts between the U.S., Iran and Israel continue, suggesting that there is a risk of a resurgence into an all-out war if a peace treaty is not signed

3) Bond markets warn of need for tightening
The U.S. Treasury market is sending a clear signal ahead of the FOMC that the benchmark interest rate is not high enough. The two-year rate, which is around 4.1%, is now well above the top of the Fed’s policy rate of 3.75%. The difference between short-term and policy rates is a reminder of the time from late 2021 to early 2022 when markets were pricing in hikes one step ahead of the Fed. At the time, the Fed eventually raised interest rates to curb inflation

4) U.S. stocks warn of downside risks
Warnings continue for the U.S. stock market. Goldman Sachs and Barclays warn that the recent plunge may not be a one-off event. Goldman Sachs points out that the concentration of positions, narrow market breadth and prospects for prolonged high interest rates create an environment in which factor liquidation can become more intense. Barclays estimates that after last Friday’s plunge, volatility control funds may have to reduce their share of U.S. stocks by about 14%p

5) China to invest in large data centers
The Chinese government plans to invest about 2 trillion yuan in the next five years to build a data center. The plan is to procure more than 80 percent of its technology, including AI chips, from Chinese companies such as Huawei, reflecting its intention to reduce dependence on Nvidia and AMD. The plan is evaluated as the most aggressive attempt among measures to lay the groundwork for China’s AI development
(자료: Bloomberg News)