● KOSPI Meltdown, AI Bubble Bursts Over One Point Four Trillion Data Center Plan

KOSPI Plummets, the Dynamics of Shaken AI Stocks Shift: A One-Time Overview Including Japanese Interest Rate, Dollar Liquidity, Nvidia Earnings, and the $1.4 Trillion Data Center Controversy

This article encapsulates the triggers behind the KOSPI plunge, the reemerging risks of yen carry trade liquidations amid surging Japanese rates, tight dollar liquidity, concerns over Nvidia’s earnings, issues with private credit, and the market’s fundamental shift from an “AI bubble” to a “figure verification stage.”
In particular, it separately outlines key points rarely discussed elsewhere, such as the connection between power/capital costs and the economics of AI data centers, the irreversible impact of yen carry trade reversals on technology stock valuations, and the clash between private credit and AI CapEx.
It provides a neatly organized news-style interpretation of the current market centered on core economic keywords like KOSPI, rate cuts, dollar liquidity, inflation, and exchange rates.

[Today’s Market Briefing] Short-Term Adverse Checkpoints

Japanese long-term rates have surged and yen carry trade liquidation risks have been reignited.
The structure of borrowing in yen → converting to dollars → investing in global risk assets has faltered, triggering a headwind in liquidity.
Foreign investors’ spot and futures sell-offs in KOSPI increased, and exchange rate volatility expanded, intensifying dollar liquidity concerns.
The dovish expectations for rate cuts retreated as Fed officials continued with hawkish comments.
Large investors’ profit-taking related to Nvidia, along with pre-earnings concerns, dampened investor sentiment.
Jeffrey Gundlach, dubbed the bond king, warned that “the next crisis is private credit,” which heightened caution regarding credit spreads.
Crypto volatility spread to risk assets overall, strengthening short-term short momentum.

[Underlying Cause] The AI Narrative Shifts from “Expectations” to “Figure Verification”

The key is that excessive optimism over AI has transitioned into a stage of “substance verification.”
As colossal figures like a “$1.4 trillion data center” have been revealed, investors have begun to scrutinize the specifics of capital procurement structures and feasibility.
Questions have arisen about whether it can be done without government intervention, whether the SPV (Special Purpose Vehicle) and circular shareholding structures are transparent, and whether bottlenecks in power, water, land, and regulations can be resolved.
As a result, a revaluation of valuations has been underway, with highly leveraged companies with weak cash flow visibility beginning to be downgraded.
Companies such as NeoCloud (cloud outsourcing/hosting) and those burdened with high debt, rapidly rising costs, or strong narratives but weak earnings have been hit simultaneously.
In contrast, the memory sector demonstrated relative defense thanks to tangible improvements in pricing and EPS estimates.

[Why Was KOSPI Hit Harder] Overlapping Supply and Structural Factors

Foreign capital flows are most sensitive to exchange rate and carry trade changes, and rising Japanese rates have prompted a reduction in carry trades.
A weakened won increased the risk premium on the KOSPI, spurring additional foreign net selling.
Due to its significant semiconductor weighting, the KOSPI also experienced amplified market beta amid concerns over a slowdown in the AI cycle.
Rebalancing by pension funds and individual exposure to volatility prolonged the search for short-term bottoms.

[Checklists for the Future] Scenarios of Trigger, Mitigation, and Caution

Trigger Factors:

• Nvidia’s earnings and guidance, updates in CSP (hyperscaler) CapEx plans, changes in HBM/DDR prices and lead times.
• News on approvals and capacity expansion of power infrastructure for data centers, and the pace of resolving bottlenecks in cooling and substation installations.
  Mitigating Factors:
• The reemergence of rate cut expectations, stabilization of long-term rates, and the stabilization of exchange rates along with eased dollar liquidity amid a weak dollar.
• The easing of Japanese bond volatility and the re-stabilization of yen carry trades.
  Caution Factors:
• The potential simultaneous exposure to stresses in private credit, commercial real estate, and structured loan sectors.
• Expanding regulatory and antitrust issues, and growing public opposition from national and local governments against data centers.

[Strategic Guide] Practical Positioning by Deconstructing the AI Value Chain

Accelerators/Servers:

• Demand remains solid, but any upcoming recalibration of customer CapEx could widen short-term declines.
• Monitor roadmaps, the CUDA ecosystem, rivals’ catch-up pace, as well as ASP and margin guidance.
  Memory (HBM/DDR/Storage Devices):
• Improvements in pricing and yield directly reflect in profit estimates.
• Capacity expansion schedules and the timing of customer validations are key to valuations.
  Power/Energy/Cooling:
• Long-term visibility is high for items such as Data Center Power Purchase Agreements (PPA), turnkey substation and cooling orders.
• A drop in rates can significantly improve project IRRs by lowering the WACC.
  Networking/Interconnect:
• Switching, optical modules, and cables directly benefit from a surge in traffic.
• Focus on the pace of product mix transitions and the adoption of new architectures.
  Software/Models/Infrastructure Optimization:
• The narrative of efficiency (cost reductions relative to performance) often attracts a premium even in downgrading phases.
• Key focus areas are the conversion rate from enterprise pilot projects to production and the proportion of recurring revenue.
  Risk Management:
• Offset interest rate, exchange rate, and liquidity risks through diversified dollar holdings, currency hedging, and duration management.
• During periods of high volatility, increase the exposure to companies with high cash flow visibility, and reduce exposure ahead of event risks.

[Key Points Not Often Mentioned Elsewhere]

The economics of AI data centers are determined by “power + capital costs.”

• When interest rates and spreads rise, the WACC increases, pushing up both the LCOE of data centers and the TCO for servers.
• Even if you achieve the same performance, the cost curve per unit of performance shifts upward, raising the investment threshold for CSPs and increasing short-term volatility in the high-priced accelerator demand.
  The reversal of the yen carry trade is more than a mere “rise in discount rates.”
• Increased hedging costs for exchange rate risk raise the holding costs for foreign investors’ long positions in tech stocks, structurally pressuring these positions to be scaled back.
• This effect can persist even after rate cuts begin, imposing irreversible margin pressure on tech stock valuations.
  The clash between private credit and AI CapEx represents a new axis in the credit market.
• If high-yield-seeking funds shift toward AI infrastructure, the credit supply to existing small and medium enterprises could be restricted.
• Even without systemic risk, if refinancing avenues in particular sectors become blocked, there could be a series of “micro defaults.”
  The demand elasticity during a slowdown in model performance improvements.
• Even if the pace of performance improvements temporarily slows, if the drop in unit inference costs is faster, total demand can be maintained.
• Conversely, if the decline in costs is delayed, the transition from PoC to commercialization for customers could be postponed.
  This delicate balance can determine quarterly guidance outcomes.

[Timeline Plan] Checklists for 2 Weeks, 3 Months, and 12 Months

2 Weeks:

• Check Nvidia’s earnings/guidance, CSP CapEx comments, the direction of Japanese long-term rates, and the level of the dollar index.
• Monitor changes in foreign futures positions on the KOSPI and whether there is a shift in the exchange rate regime.
  3 Months:
• Track any recalibration in memory prices, HBM capacity expansion and validation timelines, and news related to power/substation project orders.
• Observe the frequency of occurrences related to widening private credit spreads or negative headlines (e.g., refinancing misses).
  12 Months:
• Verify whether the rate cut cycle has begun and its pace, and check if a soft landing can be achieved without reacceleration of inflation.
• Assess whether productivity data from AI adoption is reflected in macro indicators (capital investments, employment, margins).

[Conclusion of the Analysis] Not an AI Collapse but the Entrance to Maturity

We are now in a phase of maturity where the bubble of expectations has been stripped away and substance and figures are being re-evaluated.
The KOSPI feels highly volatile due to exchange rate effects, foreign capital flows, and its semiconductor weighting.
However, if rate cuts and improved dollar liquidity occur concurrently, risk premiums may narrow again.
The decisive factors in this phase are “cash flow visibility” and “improvements in cost vs. performance.”
It is advisable to focus on sectors and companies that can substantiate their performance with figures, and to manage risks carefully before and after key events.

< Summary >

• The short-term plunge was the result of overlapping issues: rising Japanese rates, tight dollar liquidity, Nvidia earnings concerns, and fears over private credit.
• Fundamentally, AI has shifted from “expectation” to a “figure verification” stage, with highly leveraged and weak-performing stocks being the first to be downgraded.
• The KOSPI was hit particularly hard due to exchange rate pressures, trading flows, and its semiconductor weighting.
• Key checkpoints include Nvidia’s earnings, CSP CapEx, memory pricing, power infrastructure bottlenecks, and rate cuts.
• The strategy should focus on cash flow visibility, efficient software solutions, selective exposure to memory and power chains, and hedging against exchange rate and rate risks.

[Related Articles…]

• Reassessing the Semiconductor Cycle After Nvidia’s Earnings
• The Impact of Rate Cuts and Dollar Liquidity Reversal on the KOSPI

*Source: [ 내일은 투자왕 – 김단테 ]

– 코스피 급락! 최근 인공지능 주식들이 계속 흔들리는 근본적인 이유

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● AI Meltdown, Gates Dumps Microsoft, Oracle SoftBank Panic

Wall Street’s Major Players’ Suspicious Sell-Offs and the Crisis Talk Around AI Leading Stocks: Decisive Signals from Oracle and SoftBank

This article covers everything from the interpretation of Bill Gates’ massive sell-off of Microsoft, to Elon Musk’s warning indicating an MSFT–OpenAI competitive landscape, to OpenAI’s funding stress and “proxy” risks (Oracle and SoftBank), the impact of interest rates and credit spreads on the stock market, and even an immediately applicable investment checklist.

It also separately outlines the “real risk factors” and “practical signals” that are rarely addressed in other YouTube videos or news.

News at a Glance: What Is Actually Happening in the Market Now

Bill Gates significantly reduced his Microsoft holdings along with the quarterly portfolio disclosure.

However, Gates has been following a pattern of gradual sell-offs and cashing out over several years in accordance with his plan to donate 99% of his wealth by 2045, and there have been instances in the past where he sold everything and then repurchased.

Elon Musk reiterated his warning about the risk of collaboration escalating into competition by stating, “It is self-harm for Microsoft to support OpenAI.”

News of OpenAI’s declining market share and its funding difficulties have led to volatility in the related “proxy” stocks.

In the United States, Oracle, and in Japan, SoftBank, have become representative linked stocks, with increased volatility in their declines.

With Oracle’s 5-year CDS and other credit indicators rising, there has been an observed trend of some Big Tech companies experiencing a slight widening of their credit spreads.

SoftBank is gathering funds for an “all-in” strategy on OpenAI through measures such as selling Nvidia and Oracle, partially selling T-Mobile, pledging ARM stock as collateral for loans, and using corporate bonds and bridge loans.

How to Interpret Bill Gates’ Massive MSFT Sell-Off

It is difficult to definitively label this as a “Microsoft crisis” based solely on short-term selling.

Gradual sell-offs aimed at long-term charitable and foundation purposes have been repeated in the past.

The key lies in the “global economic outlook” trend, which combines the company’s fundamentals, AI strategy, cloud profitability, and the interest rate environment.

If no additional adverse factors emerge and the re-rating is maintained, the structural trend could remain valid.

Musk’s Warning: Collaboration or Direct Conflict?

Musk’s point is clear.

It is argued that OpenAI’s product roadmap overlaps with Office, development tools, and the cloud, and over time, Microsoft’s “experience and revenue models” might come into conflict.

The potential risks include the possibility that the adoption of generative AI could replace or erode Office subscriptions, direct competition in the AI application layer, and cloud margin pressures due to increased costs of models and infrastructure.

While Microsoft’s official stance is one of “expanded collaboration rather than a winner-takes-all approach,” the market has begun to factor in a cooperation-competition (co-opetition) scenario into pricing.

OpenAI Funding Stress and Proxy Risk

As issues regarding the expanding funding requirements for OpenAI and discussions about declining market share arise, investor funds that cannot be directly invested are moving to or withdrawing via related proxies.

Notable proxies include Oracle (cloud/Stargate alliance), SoftBank (equity/funding line), ARM (design ecosystem), and themes related to nuclear power and electric infrastructure.

If concerns over OpenAI increase, the proxies will fall, and if those concerns are alleviated, the proxies may rebound due to the removal of excessive discounts.

During this period, the stock market is experiencing a mix of overreactions and underreactions to news, leading to a volatile market environment.

Market Signals: What to Watch for in the Near Term

The direction of Oracle and SoftBank serves as a barometer for the intensity of AI hype or concerns.

If Oracle and SoftBank rebound simultaneously, it may be interpreted as “excessive concern,” whereas if they both remain weak, it is likely to be seen as “spreading concerns.”

The 5-year CDS, corporate bond spreads, the pulse of the short-term CP market, and interest rate levels influence the funding environment and affect Big Tech valuations.

Key global economic outlook variables include the trajectory of U.S. interest rates, power and data center CAPEX, the semiconductor cycle, and the demand elasticity for AI servers.

What SoftBank’s “All-In” Strategy Indicates

The financial leverage has increased with actions including the sale of Nvidia and Oracle, partial sale of T-Mobile, pledging ARM stock as collateral, and utilizing corporate bonds and bridge loans.

This is a high-risk, high-reward strategy betting on the scenario of “OpenAI becoming the top firm after going public,” and its success depends on funding costs and timing.

In a phase of increased leverage, rising interest rates and widening credit spreads can further increase valuation discounts.

Conversely, if concerns are alleviated and earnings visibility improves, the rebound potential of proxy stocks could be significant.

MSFT’s Defense Strategies: “Internalization” and Cost Management

Microsoft is attempting to defend its profitability with an internal model (e.g., SmallLM, its own foundation) enhancement and a Copilot bundling strategy.

The risk is that AI inference costs could erode the cloud gross margin, which requires defense through pricing policies, usage management, and hardware optimization.

While the collaboration with OpenAI remains a strong point, there are potential frictions concerning product overlap, revenue sharing, and ownership of customer interfaces.

The Most Crucial Point That Is Often Overlooked Elsewhere

The real bottleneck is not just the GPU.

Power, land, transmission grid access, and cooling infrastructure are emerging as critical factors in AI CAPEX.

Power and grid issues can influence cloud margins and the speed of service launches.

The Oracle risk is not merely a simple demand slowdown, but rather the concentration of large, long-term captive deals and delays in ramping up operational capacity.

If the initial utilization rate of large contracts is delayed, the sensitivity of accounting margins and cash flow increases.

SoftBank is employing a “look-through leverage” structure using ARM holdings as collateral.

In the event of increased ARM volatility, it is important to monitor for additional margin call risks.

Microsoft is reducing its reliance on external models while simultaneously internalizing its core intellectual property.

This is a strategy aimed at long-term cost structure stability and diversified competitive strengths.

While the adoption of AI serves as a driving force for revenue growth, it also comes with the dilemma of “self-cannibalization” of existing subscription revenue and cloud margin dilution.

Investment Strategy Guide: A Checklist to Apply Immediately

Proxy Monitoring: Check the daily trends of Oracle and SoftBank, including daily candlestick trends, trading volumes, and synchronization of credit spreads.

Interest Rate and Credit Environment: Monitor the U.S. 10-year Treasury yield, IG/OAS, and 5-year CDS trends to see if the funding window is open.

Valuation Discount: In cases of excessive discounts due to short-term news, a strategy of scaling in and technical rebound may be effective.

Diversification and Long-Term: If you are burdened by the concentration risk of Big Tech, establish a core with Nasdaq/S&P ETFs and construct satellites with an AI stack (semiconductors, memory, cloud, applications).

Cash Flow Quality: During earnings season, be sure to check the speed of cash conversion from AI revenue recognition and margin trends.

Risk Management: Document and automate stop-loss and rebalancing rules in advance.

Long-Term Accumulation: In quiet market conditions, regular Dollar-Cost Averaging is the most psychologically robust approach.

Checkpoint Calendar

Oracle Earnings/Guidance: Pay attention to utilizations and margin mentions in large AI contracts.

SoftBank Earnings/Financials: Check the leverage, collateral loan terms, and fluctuations in cash assets.

Microsoft Earnings: Review Copilot ARPU, additional revenue, and comments on Azure margins.

U.S. CPI/FOMC: Changes in interest rate trajectories directly impact Big Tech valuations.

Power/Data Center News: Issues related to power grids, locations, and transmission permits are significant factors in CAPEX timing.

Risks and Cautions

This content has been compiled and interpreted based on publicly disclosed portfolio filings and market reports.

Due to the high level of uncertainty, it is necessary to diversify scenarios rather than excessively betting on a single event.

This is not investment advice; the final decision-making and responsibility rest with the investor.

< Summary >

Key Point 1: Bill Gates’ sell-off is an extension of his pattern of charitable cash-outs, so it is premature to label it as a “MS crisis.”

Key Point 2: The MS–OpenAI relationship is a co-opetition scenario where collaboration and competition coexist, and both margin and subscription erosion risks must be monitored concurrently.

Key Point 3: Oracle and SoftBank, as proxies for OpenAI, are the most reactive and serve as immediate indicators of AI sentiment.

Key Point 4: Interest rates and credit spreads control the funding channels and impact stock market valuations, making it essential to constantly monitor global economic outlook variables.

Key Point 5: The core strategy should be diversified and long-term, while satellites can focus on selecting the right AI stack, timing, and rule-based risk management.

Keyword Optimization

Main Keywords: global economic outlook, interest rates, stock market, artificial intelligence, Big Tech.

< Related Articles... >

Debunking Oracle’s Plunge and AI Proxy Risk

SoftBank’s All-In on OpenAI and the Assessment of Funding Risks

*Source: [ 소수몽키 ]

– 투자 큰손들의 수상한 매도, AI대장주들에게 찾아온 위기

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● KRW Meltdown, 1,600 Imminent

The Reason Why the KRW/USD Exchange Rate Soars Despite a Weak Dollar and the 1,600 Won Scenario

Right now, the article covers the true background behind the drastic fall of the Korean won even amid a weakening Dollar Index, includes scenarios outlining a path toward 1,500–1,600 won, explores market shocks due to uncertainties in trade negotiations, and explains the significance of foreign exchange reserves and currency swap arrangements, as well as providing a checklist for individual and corporate responses, and linking the AI investment cycle to exchange rates.
It neatly organizes details on topics not often discussed by other YouTube channels or news outlets, such as the microstructure of NDF (offshore futures), cross-currency basis, and foreign currency LCR capital flows.

Headline Check: News-Style Summary

• Despite the Dollar Index hovering below 100 in a weak range, the KRW/USD exchange rate continues to surge, indicating abnormal signals.
• Structural vulnerabilities (only about 0.1% share of the global financial settlements in KRW, a low ratio of forex reserves to GDP, and limitations in the currency swap network) are deeply rooted.
• In the short term, uncertainties such as delayed announcements from trade negotiations, net selling by foreign investors in stocks, pension fund currency hedging, and the spread of a weak yen have pushed up the exchange rate.
• From an interview perspective, scenarios such as a premature re-break of 1,500 won and touching 1,600 won in 2026 were mentioned.
• The sharp rise in the exchange rate could be a “leading signal” of a potential recurrence of a foreign exchange crisis, calling for proactive measures by both policymakers and the private sector.

Why Is the Korean Won Weak Despite a Weak Dollar? Structural Factors Explained

• The global financial presence of the Korean won is small.
  Being a minor player in international settlements and transactions means that in times of shock, demand drops sharply and volatility increases.
• The “ratio and composition” of foreign exchange reserves is more important than their “size.”
  Market confidence hinges on ratios relative to GDP, the share of highly liquid assets, and the ability to repay short-term external debt.
• The safety net provided by currency swaps is shallow.
  In areas where the lines with the US and Japan are weak, the psychological shield is absent, making the exchange rate more sensitive.
• Changes in the “quality” of the current account.
  Even with a surplus, factors such as deficits in service and travel accounts, increased dividend and royalty remittances, and hedging costs for energy imports can all tighten demand for dollars.
• Doubts surrounding fiscal and debt trajectories.
  If rising national debt ratios combine with concerns over declining growth (potential growth rate), credit premiums will widen.

Short-Term Triggers Pushing Up the Exchange Rate

• Delay in the release of the trade negotiation fact sheet.
  Prolonged uncertainty over specific provisions leads to a reduction in KRW exposure by foreign investors and institutions.
• Expansion of net selling by foreign investors in stocks.
  As of November, significant net selling has been observed, replicating a typical pattern of simultaneous weakness in both stocks and the exchange rate.
• Changes in the currency hedging ratios of pension funds and institutions.
  If Korean won depreciation accelerates during hedge roll periods, derivative positions can amplify the rise in the exchange rate.
• Synchronization of a weak yen with a weak euro.
  Amid a general framing of weakness across Asian currencies, the won, being a high-beta currency, moves more significantly.
• Energy prices and LNG hedging demand.
  In winter, overlapping import settlements and hedging needs seasonally increase dollar demand.
• Imbalances in option and NDF positions.
  If a gamma squeeze occurs near a specific strike (e.g., above 1,500 won), volatility can spike sharply in a short period.

Numbers Supporting the “Undervalued Won” Hypothesis

• Thought experiment: If the KRW/USD stands at 1,500 won when the Dollar Index (DXY) is 95, then assuming a DXY level of 110, the KRW/USD would be arithmetically estimated to be in the range of 1,650–1,700 won.
• This serves as evidence that it is not “a strong dollar” driving the movement, but rather a pronounced inherent weakness of the Korean won.
• However, a simple linear conversion does not perfectly explain the actual exchange rate, so it should only be used to check directional trends.

Scenario: The Path and Turning Points Toward 1,600 Won

• Baseline (gradual unease): Fluctuations within a 1,450–1,520 won box.
  If detailed trade negotiations are announced and foreign inflows stabilize, the rate could return to the mid-1,400 won range.
• Risk Upside (Heightened unease): Testing levels between 1,550–1,600 won.
  Credit rating downgrades, disruptions in swap lines, legal or institutional risks, and geopolitical variables combined could trigger a sharp rise.
• Risk Downside (Recovery rally): Normalizing in the range of 1,380–1,420 won.
  If currency swap arrangements improve, strategies for managing forex reserves are enhanced, and semiconductor export momentum accelerates, the won could strengthen.

Policy Proposals: The “Triple Set” That the Market Trusts

• Strengthen foreign exchange liquidity defenses.
  Increase the share of highly liquid foreign assets, proactively prepare to utilize FIMA repo lines, and build a buffer for short-term external debt maturities.
• Expand the swap network.
  Efforts to restore lines with the US and Japan should be accompanied by an increase in regional multilateral swaps and the establishment of a long-term, continuous framework.
• Enhance macro-financial stability.
  Improve management of foreign currency LCR/NSFR for banks and non-bank institutions, fine-tune burden charges (macroprudential surcharge) on non-core foreign currency debt, and heighten monitoring of speculative NDF positions.
• Increase predictability in trade and investment policies.
  Quickly disclose the fact sheet and strengthen communication with stakeholders to restore policy confidence.
• A mid-term roadmap for expanding the use of the Korean won.
  Create structural demand through pilot projects for KRW invoicing in regional trade and strengthen links with payment infrastructure (CLS/clearing).

Practical Checklist for Individual Investors and Corporates

• Individual Investors
  1) Dollar allocation strategy: Build a defensive layer with cash, MMFs, and short-term US treasuries.
  2) Stock allocation: Focus on US stocks (especially large-cap companies with strong cash flows and AI beneficiaries), while managing Korean exposures mainly in semiconductor and energy efficiency themes.
  3) Currency hedging: Gradually hedge during peak dollar strength using cost-efficient options such as call spreads and risk reversals.
  4) Key indicators to monitor: DXY, net foreign buying in the KOSPI, 5Y CDS, the 2-year Korea-US interest rate differential, and the NDF 1M spot-to-futures basis.
• Exporting and Importing Corporates
  1) Hedge layering: Diversify settlement amounts across maturities and roll over exposures over 3, 6, and 9 months.
  2) Conduct stress tests: Update sensitivity charts for exchange rates at 1,550, 1,600, and 1,650 won.
  3) Diversify financing: Spread out maturities for foreign currency commercial papers and loans, and secure pre-approvals for credit limits.
  4) Accounting and governance: Expand the scope of hedge accounting and operate a weekly review via an ALM committee.

Connecting AI Trends and the Exchange Rate

• As the US-centered AI investment cycle undergoes cycles of overheating and correction, global financial liquidity tends to concentrate in large US stocks, making emerging markets like Korea more vulnerable to volatility.
• A reduction in foreign ownership of Korean stocks directly translates into selling pressure on the won.
• Conversely, if the export cycle accelerates again through AI servers, HBM, and foundries, demand for the won will be revived.
• The pace at which AI CAPEX adjusts in 2025–2026 could be a key variable for Korea’s economic outlook and the exchange rate path.

Key Points Not Often Covered Elsewhere

• NDF microstructure and gamma squeezes.
  Delta hedging by market makers above a specific strike can lead to spot purchases that trigger short-term surges.
• Expansion of the cross-currency basis.
  If the dollar funding premium spikes, the covered funding costs for banks and insurers increase sharply, exaggerating won weakness.
• Foreign currency LCR and short-term external debt maturity pressures.
  Management of regulatory indicators that converge at quarter-end or half-year-end could stiffen the dollar supply in the market.
• Changes in corporates’ dollar holding tendencies.
  In times of uncertainty, if export companies convert less of their dollars into won domestically, the market sees reduced supply.
• Structural shifts in the service account.
  Persistent dollar demand is generated by accounts in travel, content, and royalties.
• The timing of policy communication.
  Information gaps, such as delays in the fact sheet, can amplify even minor news.

Weekly Focus Points

• Whether and how detailed trade negotiation announcements are disclosed, and the market’s reaction.
• Signals from changes in foreign stock and futures positions.
• The 5Y CDS and the spread between Korean and US 2-year government bonds.
• Changes in the contango/backwardation of the NDF 1M and 3M curves.
• Energy prices and the shape of the futures curve (Brent and LNG).
• The presence of fine-tuning (smoothing) actions by authorities.

Core Message to Prevent a Recurrence of Crisis

• A sharp rise in the exchange rate is a frontline signal of stress in the foreign exchange market.
• When structural vulnerabilities meet short-term uncertainties, the price can become exaggerated.
• Predictable policies and strong foreign exchange liquidity defenses create market confidence.
• Both individuals and companies must “buy time” through effective currency hedging and cash flow management.
• Monitoring both the AI and global financial cycles is essential for understanding Korea’s exchange rate and economic outlook.

< Summary >

• Despite a weak dollar, the weakening of the Korean won results from structural vulnerabilities compounded by short-term uncertainties.
• The 1,500–1,600 won scenario hinges on credit, swap, and trade variables.
• Key policy measures include the triple set of foreign exchange liquidity, swap arrangements, and macro-financial stability, with communication speed being crucial.
• Individuals and companies should defend themselves through dollar allocation, currency hedging, and staggered maturities, while continually monitoring changes in the AI cycle’s capital flows.

[Related Articles…]

• Korean Won Plunge, Assessing the Possibility of a 1,600 Won Exchange Rate
• The AI Bubble and the 2025 Outlook for the Global Financial Cycle

*Source: [ 경제 읽어주는 남자(김광석TV) ]

– “원화 가치 급락 신호” 지금 환율, 달러 약세인데도 환율 폭등… 한국만 추락하는 이유 | 경읽남과 토론합시다 | 김대종 교수 1편

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