US-EU 'Tariff Suspension' New Phase... Last Presidential Debate Today [Morning Briefing]

◆ US-EU '50% Tariff Suspension'... New Phase in Negotiations

President Donald Trump of the United States has agreed to postpone the imposition of tariffs on the European Union (EU) for about a month, allowing negotiations between the two sides to overcome a hurdle. Trump agreed to the EU's request to delay the imposition of the '50% tariff' scheduled for the 1st of next month, and the economic leaders of both sides had a phone call on the 26th local time. Although the specific details of the call were not disclosed, the EU stated, "A new momentum for negotiations has emerged. It is positive that there is engagement at the top level," indicating that the immediate crisis has been averted and a new phase has begun. As President Trump expressed dissatisfaction with the delay in negotiations with the EU and brought out the 50% tariff card, there is speculation that the EU may present additional concessions to the US.

◆ New York Stock Exchange Closed, Dollar-Won Exchange Rate 'Stagnant'

With the New York Stock Exchange closed on the 26th local time for 'Memorial Day,' the dollar-won exchange rate remained stagnant, closing at 1,370 won. At 2 a.m. Korean time, the exchange rate ended at 1,370.5 won, down 5.1 won from the previous closing price in the Seoul foreign exchange market. It rose 6.1 won compared to the weekly closing price of 1,364.4 won this session. Meanwhile, Christine Lagarde, President of the European Central Bank (ECB), stated in a speech in Berlin, Germany, that due to policy changes by President Trump, the status of the euro as an alternative to the key currency dollar could increase, saying, "A 'global euro moment' is opening due to continuous changes."

◆ Consumer Sentiment 'Optimistic' Reversal... Largest Improvement in About 5 Years

Consumer sentiment has improved by the largest margin in 4 years and 7 months, driven by the US mutual tariff suspension measure, expectations for supplementary budgets, and new government economic policies. According to the 'Consumer Sentiment Survey' released by the Bank of Korea on the 27th, the Consumer Confidence Index (CCSI) for May was 101.8, up 8 points from last month (93.8). The index had been below 100 since the state of emergency in December last year, indicating 'pessimism,' but has now turned 'optimistic.' The Bank of Korea evaluated, "Negative factors such as political uncertainty and US tariff policies, which had constrained consumer sentiment recovery, have eased, leading to a significant improvement in the consumer sentiment index," but added, "It remains to be seen whether this trend will continue as it reflects expectations for future economic conditions."

◆ Last Presidential Debate Today... 'Political Polarization' Theme

△Lee Jae-myung of the Democratic Party of Korea △Kim Moon-soo of the People Power Party △Lee Jun-seok of the Reform Party △Kwon Young-kook of the Democratic Labor Party will hold the last TV debate today (27th). The debate, themed on politics, will have each candidate express their views on 'ways to resolve political polarization,' followed by a policy verification debate on political reform, constitutional amendments, and foreign and security policies. Leading candidate Lee Jae-myung is expected to focus on a 'defensive strategy' to prevent losing points. Unlike Lee, who has pledged a constitutional amendment for a four-year renewable term, Kim argues for a four-year term with a shortened three-year term for the elected president. Lee Jun-seok is expected to question Lee Jae-myung's policy consistency and governance ability by raising various issues surrounding him, while Kwon is likely to emphasize political reform pledges such as the introduction of an open regional party list system.

◆ 'Midday Heat' Continues with Showers in Gangwon and Yeongnam in the Afternoon

Today, Tuesday, the country will be partly cloudy, with showers expected in the afternoon to evening in the inland and mountainous areas of Gangwon, Ulsan, and the inland areas of Gyeongsang Province, and the northeastern mountains of Gyeongbuk. During the showers, there may be gusts of wind, thunder, and lightning, and hail is forecasted in some inland areas of Ulsan and Gyeongnam. The highest daytime temperatures will range from 21 to 28 degrees, making it hot in the midday, but with a temperature difference of around 15 degrees in inland areas, caution is advised for health management. The fine dust concentration is expected to be 'good' or 'moderate' nationwide, but the metropolitan area and Chungnam are expected to show 'poor' levels in the morning.

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