September Rate Hike Probability at 35%, KOSPI Rises 3.6%

The U.S. Consumer Price Index (CPI) for July rose by 0.1% month-on-month and 3.4% year-on-year, leading to a recovery in risk appetite in Asian stock markets and Bitcoin (BTC). The KOSPI increased by 3.6% on the 13th, while BTC traded at $63,833, up 0.5% following the July CPI announcement. The Producer Price Index (PPI) for July rose by 4.7% year-on-year, reducing the market's expectations for additional tightening by the Federal Reserve (Fed) in September. According to the CME FedWatch, the probability of a rate hike at the September FOMC has decreased from 40.4% to 35%. The Fed held the benchmark interest rate steady at 3.50-3.75% during the FOMC meeting on July 29, although some members advocated for a 0.25 percentage point increase. The rebound in the Korean market was particularly notable among Asian stock markets, with major semiconductor stocks like Samsung Electronics and SK Hynix leading the gains. This trend is attributed to adjustments in expectations for U.S. interest rates, as inflation did not rebound sharply, leading to lower bond yields and a weaker dollar. Additional employment and inflation indicators remain before the September FOMC, and the market is paying close attention to how the next indicators will impact the interest rate path.