International News 05/12
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South Korea provides unlimited liquidity to financial markets after political turmoil
The Ministry of Finance of South Korea has announced its intention to provide an unlimited amount of liquidity to financial markets in order to support the won's recovery from its current low point. The decision to inject liquidity was taken following an emergency meeting between Finance Minister Choi Sang-mok and Bank of Korea (BOK) Governor Rhee Chang-yong, and in advance of an extraordinary BOK meeting. The South Korean government has announced that all financial markets, including foreign exchange and the stock market, will resume normal operations. Additionally, it has committed to providing unlimited liquidity to stocks, bonds, short-term money markets, and forex markets until full normalization is achieved. Following the unanimous vote in parliament against the surprise declaration of martial law by President Yoon Suk Yeol, the South Korean won saw a modest recovery. Consequently, U.S.-listed South Korean stocks experienced a decline, while U.S. futures indicated a lower opening.
Low Inflation, Thailand's Finance Minister Claims Interest Rate is Likely to Be Cut
In a recent statement, Thai Finance Minister Pichai Chunhavajira highlighted the potential for interest rate cuts in Thailand due to the country's low inflation rate. He highlighted the importance of a coordinated approach between monetary and fiscal policies to provide economic support. Additionally, Pichai expressed his desire for the baht to stabilise at a weaker level, with the aim of providing further support to the economy. He forecast that the Thai economy could expand by 4% to 5% next year, provided that policies are effectively coordinated. The projected growth for this year is between 2.6% and 2.8%. Mr. Pichai stated that he would like to see further rate cuts, but that the ultimate decision would be made by the Bank of Thailand's rate-setting committee. The International Monetary Fund has also indicated that further reductions in interest rates could facilitate Thailand's economic recovery.
Oil Prices Correct Slightly Ahead of OPEC+ Meeting
Oil prices saw a slight decline on Tuesday morning, influenced by mixed market signals and anticipation for the upcoming OPEC+ meeting. Brent crude oil futures declined by 0.13% to $71.74 per barrel, while US West Texas Intermediate crude oil prices fell by 0.21% to $67.96. In light of the forthcoming OPEC+ meeting, investors are adopting a wait-and-see approach, with expectations that the producer group will extend production cuts until the end of the first quarter of 2025. However, the potential for oversupply has exerted downward pressure on prices. Furthermore, concerns about China's oil demand peaking next year and Saudi Arabia's plan to reduce crude prices for Asian buyers have also impacted market sentiment. Additionally, the reluctance of the US Federal Reserve to cut interest rates in its December meeting has further suppressed oil prices.
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