<Five Things to Know Before Today's Opening Bell_12/30 Bloomberg>
1) Bitcoin 'Kimchi Premium' Soars Amid Political Turmoil in South Korea
The political unrest in South Korea, triggered by martial law and impeachment proceedings, has reached a peak, with the "kimchi premium," a key indicator of Korean investors' interest in bitcoin, hitting a four-month high. The kimchi premium, which reflects the price difference between bitcoin traded on South Korean cryptocurrency exchange Upbit and US-based Coinbase, surged 3~5% last week. This typically indicates an increase in demand for bitcoin among Korean investors. A similar surge was observed in the kimchi premium of stablecoin Tether. Joo Kyung-Young, founder and CEO of CryptoQuant, explained that "South Korea is facing unprecedented capital outflows amid political turmoil, declining birth rates, and slowing growth," adding that people are fleeing the Korean won for US stocks, bitcoin, gold, and dollars due to inflation fears.
2) Trump Asks Supreme Court to Delay TikTok Ban; 'Seeking Solution Through Negotiation'
President-elect Donald Trump has requested the US Supreme Court to delay the implementation of a law that would ban TikTok in the United States unless Chinese parent company ByteDance sells its US business by January 19th. Trump stated that he intends to "find a solution through negotiation" after taking office on January 20th, claiming that he alone possesses the "diplomatic skills and political will entrusted by voters to resolve national security concerns while simultaneously finding a solution to acquire the platform."
3) ECB's Holzmann Says Interest Rate Cuts Could Be Delayed Further Due to Inflation Risks
Robert Holzmann, a member of the European Central Bank (ECB)'s policy board, suggested that further interest rate cuts could be delayed if inflation risks materialize due to euro weakness or rising energy costs. Holzmann, governor of the Austrian central bank, said "we may need more time before lowering interest rates again," adding that "it is true that some energy prices are showing an upward trend. There is also another scenario where inflation could return, such as a further depreciation of the euro."
4) BOJ January Rate Hike Possible; Japan's 10-Year Bond Yield Hits 13-Year High
Although the Bank of Japan (BOJ) recently decided to freeze its policy, signaling that a rate hike remains possible next month, Japanese government bond yields surged to a 13-year high on Friday. The swap market priced in a roughly 43% chance of a rate hike in January and a 70% chance in March. The dollar-yen exchange rate, which had exceeded 158 yen, also fell back to the mid-157 yen range.
5) Xi Jinping Says China's Reform and Development Tasks Will Be 'Tough' Next Year
Chinese President Xi Jinping said that China's reform, development, and stabilization tasks next year will be "very challenging" and instructed government officials to focus on fundamental issues that need to be addressed urgently, according to state broadcaster CCTV. China aims to deepen reforms to support economic recovery and achieve the goals of its five-year plan ending in 2025. No specific details were given about stimulus measures. Xi also emphasized that the Communist Party must "take an extremely firm" stance against corruption.
(Source: Bloomberg News)
