South Korea: GDP Growth increased to 0.7%

South Korean GDP expanded a seasonally adjusted 0.7 percent on quarter in the three months to June of 2016, improved slightly from a 0.5 percent growth in the previous period and also in line with market expectations. This was mainly due to a recovery in private spending, exports and rising investment.

"Growth at 0.7 per cent comes as a relief but construction will probably slow from now on. GDP growth in annual terms is likely to ease to the 2-per cent range in the third and fourth quarters," said Mr Park Jung-woo, an economist at Korea Investment and Securities.

In addition, South Korea will submit a US$9.7 billion supplementary budget to Parliament later on Tuesday that will focus on creating more jobs to make up for severe job cuts as the struggling shipping and building industries are overhauled.

"The government's extra budget will only partially affect this year's growth and this may lead to more demand for another rate cut," said Mr Park.

Market Snapshot



Equity Markets: Top performers: Hong Kong, Hong Kong China H-Shares, South Africa. Worst performers: Japan. The Nikkei fell 1.3 percent to 16,400.47 in mid-morning trade, after falling to as low as 16,344.34 .Topix lost 1.3 percent to 1,308.69 and the JPX-Nikkei Index 400 declined 1.3 percent to 11,767.95. MSCI's broadest index of Asia-Pacific stocks outside Japan was 0.2 percent firmer, still consolidating after recently topping out at nine-month highs. The Australian index eased 0.26 percent and the Shanghai Composite gained 0.42 percent. The Dow Jones industrial average fell 0.42 percent to end at 18,493.06 points and the S&P 500  lost 0.3 percent to 2,168.48. The Nasdaq Composite edged down 0.05 percent to 5,097.63.

Currency Markets : Top performers: AUD/USD, NZD/USD, NZD/CAD Worst performers: CHF/JPY, USD/JPY, GBP/JPY. The dollar lost 0.9 percent against the yen to 104.84, while the euro skidded 1 percent to 115.19 yen. The pound fell 0.2 percent to $1.3118. The Australian dollar rose 0.2 percent to $0.7482. The dollar index edged down 0.1 percent to 97.173, below the previous session's high of 97.569.

Commodities Markets: Top performers: Soybean Oil, Soybean, Soybean Meal. Worst performers: Copper, Natural Gas, Oats. International Brent crude oil futures were trading at $44.80 per barrel, up 8 cents from their last close. U.S. West Texas Intermediate crude was at $43.16, up just 3 cents per barrel. Spot gold was at $1,315.51 an ounce, hovering above the previous session's close of $1,315.15. Palladium fell 0.7 percent to $679.72. Both silver and platinum inched up 0.3 percent to $19.59 an ounce and $1,081.30 respectively.

Treasuries: Top performers: Euro Bund, US-T Bond. Worst performers: Euro Schatz. The yield on the two-year note was up over 1 basis point to 0.723 percent after earlier reaching 0.731 percent, matching the near four-week high struck last Thursday. Benchmark 10-year Treasury notes were last down 2/32 in price for a yield of 1.575 percent, up almost 1 basis point from Friday.