[Morning Briefing] U.S. Stock Market Falls Ahead of Inflation Data Release... Dollar-Won Exchange Rate 'Surges'

◆ Weakening Risk Asset Appetite... New York Stock Market Falls Together

The major indices of the New York Stock Exchange fell together. On the 9th local time, the Dow Jones index closed at 44,401.93, down 0.54% from the previous session, the S&P 500 index fell 0.61% to 6,052.85, and the Nasdaq index also dropped 0.62% to 19,736.69. The Dow index has fallen for three consecutive trading days since breaking the 45,000 mark for the first time on the 4th, and the S&P and Nasdaq indices retreated from the all-time highs set in the previous session. The news that Chinese regulators are investigating NVIDIA for alleged violations of antitrust laws led to a 2.55% drop in NVIDIA's stock price, among other factors such as the surge in oil prices, weakening the appetite for risk assets. The market showed a 'wait-and-see' attitude ahead of the final inflation data to be released this week.

◆ Exchange Rate Surges... Dollar-Won Closes at '1,435 Won' in Early Morning

Amidst instability in the exchange rate due to martial law and impeachment situations, it remained at a high level even in overnight trading. Early this morning (10th), the dollar-won exchange rate closed at 1,435 won, a sharp rise of 15.8 won from the closing price of the Seoul foreign exchange market's daytime trading (3:30 PM). The value of the won is at its lowest level in about two years since October 24, 2022. It is known that intervention volumes presumed to be from foreign exchange authorities entered the market during daytime trading, but the weakness continued. A Bank of America official analyzed in a foreign media interview that “the possibility of prolonged uncertainty due to the failure of impeachment has increased. The downward pressure on the won is intensifying due to political instability added to weak economic fundamentals.”

◆ U.S. State Department "Expect Peaceful Resolution of Korean Situation According to Law"

On the 9th local time, the U.S. State Department expressed its expectation that “political disagreements will be resolved peacefully according to the rule of law” regarding the ongoing confusion in Korea due to President Yoon Suk-yeol's martial law and impeachment controversy. State Department spokesperson Matthew Miller emphasized 'Korea's democratic resilience' during a briefing and mentioned this. He said, “The ROK-U.S. alliance remains ironclad,” but regarding the ROK-U.S. Nuclear Consultative Group (NCG) meeting and tabletop exercise, which were scheduled to be held in Washington on the 4th-5th but were indefinitely postponed after the martial law declaration, he only said, “There is nothing to say about rescheduling.”

◆ 'Permanent Special Prosecutor for Rebellion' Demand to be Submitted at National Assembly Plenary Session

On the last day of the 22nd regular session of the National Assembly today, a plenary session is expected to be held to submit a demand for a permanent special prosecutor investigation to uncover the truth of the martial law situation. The demand for a permanent special prosecutor investigation, which was passed solely by the opposition party at the National Assembly's Legislation and Judiciary Committee's plenary session yesterday (9th), includes a request for a special prosecutor investigation into the rebellion charges against President Yoon Suk-yeol, former Defense Minister Kim Yong-hyun, and former Martial Law Commander Park An-soo. Prime Minister Han Duck-soo, former People Power Party floor leader Choo Kyung-ho, and Defense Security Command Director Yeo In-hyung are also included as subjects of investigation. There is also a possibility of submitting the 'reduced budget bill' processed solely by the Democratic Party of Korea at the National Assembly's Special Committee on Budget and Accounts on the 2nd to the plenary session.

◆ Cold Eases Slightly... Daytime Highs 6-12 Degrees

Today, Tuesday, the whole country is expected to be mostly clear, but clouds will gradually increase from the night. With daytime highs of 6-12 degrees, slightly higher than usual, many areas are expected to have very dry air, so caution is needed to prevent various fires. The fine dust concentration is forecasted to be 'good' or 'moderate' nationwide.

Kim Bong-gu, Hankyung.com reporter kbk9@hankyung.com