A screen displays the Kospi index and the exchange rate between the South Korean won and the U.S. dollar inside a trading room at Hana Bank in Seoul, South Korea, on Monday, Dec. 16, 2024.
SeogJoon Cho | Bloomberg | Getty Images
This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open gives investors access to everything they need to know, wherever they are. Like what you see? You can subscribe here.
What you need to know today
All eyes on the US jobs report
The US nonfarm payrolls report for December will be released later on Friday. Economists expect it to show an increase of 155,000 jobsdown from 227,000 in November, and the unemployment rate to remain unchanged at 4.2%. Analysts from Goldman Sachs and Citigrouphowever, think that both numbers will be worse than the consensus forecast.
US markets will be dark, European markets will close higher
US markets were closed on Thursday in honor of former President Jimmy Carter, who was he died at the end of December at the age of 100. Europe Stoxx 600 index added 0.42% thereafter start the day in negative territory. Denmark's Moller-Maersk fell 5.8% amid a broader sell-off in shipping stocks after indefinite employment contract he was caught by US dock workers.
Fed governor thinks December cut should be 'last step'
US Federal Reserve Governor Michelle Bowman said the Fed's Interest rate cut in December to be his “last step in the policy recalibration phase.” That suggests Bowman, who is a voting member of the Federal Open Market Committee, they could face further cuts this year. Other Fed officials who spoke this week were more optimistic about lowering rates.
Ubisoft explores 'strategic and capital options'
French video game publisher Ubisoft he said on Thursday that they have hired “key advisers” to review options “to deliver the best value to stakeholders.” It was reported in October that the Guillemot family who founded Ubisoft and Tencent were considering a take over the company. With Ubisoft shares at 10-year lows, the company the future faces questions.
(PRO) Sweet spot for jobs report
The US economy is in a delicate balance between growth and inflation. The jobs report, out on Friday, shows how difficult this balance is. Too hot, and Treasury yields could rise; too cold, and fears of an economic slowdown could stop stocks, said Goldman Sachs. But the S&P 500 it could accumulate if the report comes in at just the right field.
The bottom line
South Korea can't catch a break. In the past month, the country has been placed under martial law, its president – and stand-in – has been installed, it is on its second active president (until this) and suffered a terrible plane crash.
How did these events affect the Korean market?
Going by the Kospi index: not much. The index, which tracks all common stocks listed on the Korean Stock Exchange, is now higher than it was on December 3, when President Yoon Suk announced Yeol martial law was dismissed.
Its stability can be traced to Korea's political history and the quick – and perhaps serendipitous – actions of the Bank of Korea.
Yoon and Han Duck-soo are just the two most recent ousted presidential figures in Korean history. Before them, Roh Moo-hyun was impeached in 2004 (although the court overturned it), while Park Geun-hye was impeached in 2016 and sent to out of office the following year.
“Presidential impeachments are not unique in Korea, and the country's equities, at least, did well in the end in the last one in 2016/2017,” said Thomas Mathews, head of markets Capital Economics' Asia Pacific, said.
Uncertainty caused by the two impeachments in Korea “has subsided within three to six months,” Soohyung Lee, a member of the Bank of Korea's Monetary Policy Board, said. CNBC reported on January 2, so “it is possible that the political turmoil will not tax the country's economy as much.”
The Bank of Korea's actions also appeared to calm markets.
Within a day of lifting Yoon martial law, the BOK announced emergency measures to stabilize markets and prevent instability. Likewise, a surprised at the 25 point base rate cut by the BOK at its November meeting, which was enacted before Yoon declared martial law in December, could have softened the blow.
Internal factors may not be the biggest threat to the Korean economy and markets in the coming year. The external risks that are set by US President Donald Trump are worse tariffs, especially for an export-driven country like Korea, said Lee.
Korea's recent troubles show that when one branch of government fails, other institutions can still prop up a country and its economy – but the governments of others are much more difficult to deal with.
— CNBC's Lim Hui Jie and Lee Ying Shan contributed to this report.
