GS Morning: FX Trader Call, UK Policy, US CPI, and KRW Update

GS Morning highlights a reduced UK fiscal headroom of £12bn, US inflation distortions from AI-integrated software pricing, and intense selling pressure in South Korean equities and the KRW.

Key Takeaways

• 1.UK fiscal headroom is estimated to reduce by £12bn (0.3% of GDP) due to higher gilt yields and lower growth.
• 2.US Core CPI for April rose 0.38%, exceeding expectations; AI software pricing bundles and energy pass-through are expected to delay core PCE disinflation until later in 2026.
• 3.South Korean markets saw significant foreign equity outflows ($7.1bn over two days) following a chip stock selloff, pushing USDKRW toward the 1500 level.

Table of Contents

• 1) FX Trader Call Today @ 2:00 PM LDN
• 2) UK Policy and Markets Outlook
• 3) US ECON (WALKER) - US CPI & Inflation Views
• 4) KRW Update

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