00:02you're listening to ai prism from seoul economic daily the fed just went from the labor market is
00:09fine to a coin flip on whether it hikes next month that changes your global rates trade
00:15korea's equity market just posted a real rebound with foreign money finally coming back but korea's
00:21corporate credit market is telling a very different more cautious story and nvidia's
00:26credit risk just eased on a governance clarification which matters if you're pricing ai infrastructure
00:32exposure anywhere in your portfolio here's why global investors are paying attention to korea
00:38today u.s labor data has weakened while inflation pressure has intensified splitting fed officials
00:44nearly evenly on whether to hike in september korean equities battered earlier this year by extreme
00:51volatility and heavy foreign selling have started stabilizing as leveraged positions unwind and
00:57market breadth improves at the same time korea's corporate bond market is tightening even as
01:03stocks rally a divergence that matters for anyone assessing country level risk here's what the
01:08numbers show fed funds futures now price a 50.1 percent probability the fomc holds rates in september
01:16versus 49.9 for a 25 basis point hike according to cme fed watch data as of august 11th cleveland
01:25fed
01:25president beth hammock argued for multiple future hikes given three fomc meetings remain this year
01:32while chicago fed president austin goolsby said inflation not the labor market is now the bigger
01:38threat non-farm payrolls fell 23 000 in july against wall street expectations even as inflation continues to
01:46run persistently above target the cosby closed at 6579.04 on august 12th up 3.68 percent for a third
01:57straight session with intraday volatility narrowing to 3.45 percent in august from 7.10 percent in july
02:052.84 trillion won roughly two billion dollars is what foreign investors net bought in korean equities on
02:13august 12th marking a second consecutive day of buying after 541 billion won the previous session
02:20elevated corporate borrowing costs the three-year aa minus bond yield hit 4.651 percent last month
02:29near a three-year high have cut large company bond issuance 32 percent year-on-year to a four-year
02:35low
02:36even as equities rebound nvidia's 2056 bond spread over treasuries narrowed two basis points to 113
02:45basis points and its five-year credit default swap tightened up to five basis points to 72.11
02:52after ceo jensen huang clarified nvidia would fund at most 25 percent of any ai infrastructure deal
03:00core weave's second quarter revenue came in at 2.58 billion dollars up 112 percent year on year and
03:08above consensus alongside a 104.2 billion dollar backlog that underscored continued ai infrastructure
03:16demand supporting korean memory exporters so what does this mean for global investors watching korea
03:22earlier we said the fed just moved to a coin flip on september here's what that actually means for you
03:28rate path uncertainty this close to a decision typically widens volatility in both the dollar
03:34and emerging market currencies the wan included the equity rebound and returning foreign flows argue
03:41for tactically re-engaging korean exposure but the corporate bond markets continued tightening is a
03:47reminder that credit conditions haven't normalized even as the headline index recovers nvidia's easing credit
03:53risk is a modest positive read through for korean memory exporters tied to ai infrastructure build out
03:59though it's worth confirming core weaves and nvidia's numbers hold up when full earnings post later this
04:05month here's what to watch first the september fomc decision given futures markets currently price it as
04:13essentially a coin flip second whether foreign net buying of korean equities extends to a third
04:18consecutive session which would strengthen the case for a durable inflow trend third nvidia's upcoming
04:25quarterly earnings report flagged by bank of america as the next catalyst for confidence in its ai
04:31financing structure that's today's ai prism global investors this episode was produced with ai
04:38assistance based on sole economic daily reporting and reviewed by a human editor ai prism is a juan ifra
04:46award-winning series we'll be back tomorrow you've been listening to ai prism from sole economic daily
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