Nex Pulse — Daily Market Brief

Global markets remain under sustained pressure as geopolitical tensions in the Middle East continue to influence investor sentiment. Despite ongoing escalation risks, markets are increasingly balancing geopolitical developments with macroeconomic signals, particularly monetary policy expectations in the United States.

Recent remarks from Federal Reserve Chair Jerome Powell suggest that tariff-driven inflationary pressures may be temporary, which markets have interpreted as a potential signal toward future policy easing.

Korean equity markets experienced broad declines across major indices, driven primarily by persistent foreign capital outflows.

Key developments include:

• Foreign investors recorded net selling of approximately 33.5 trillion KRW this month
• Domestic investors provided partial support, with net purchases of approximately 32.4 trillion KRW
• Foreign investors recorded net buying on only three trading days during the month

At the same time, the Korean won weakened further, surpassing the 1,540 KRW per USD level, reflecting continued external pressure.

Geopolitical tensions are extending beyond oil markets and increasingly affecting critical industrial inputs.

Helium supply disruptions have emerged as a key concern:

• Qatar, a major global supplier, relies on the Strait of Hormuz for distribution
• Recent attacks have impacted production facilities, reducing output by approximately 14 percent
• Full recovery is estimated to take up to five years

Given helium's critical role in semiconductor manufacturing and advanced technologies, supply constraints could have significant downstream impacts across technology and industrial sectors.

Military escalation risks continue to evolve:

• More than 7,000 U.S. troops, including Marines and airborne units, have reportedly been deployed to the Middle East
• The possibility of ground force engagement remains uncertain
• Iran has indicated strong resistance in the event of escalation

At the same time, there are indications that the United States may seek to conclude the conflict early, regardless of full strategic control over key energy routes such as the Strait of Hormuz.

The geopolitical situation remains fluid, with markets reacting to both escalation risks and potential de-escalation scenarios.

The South Korean government announced significant fiscal measures to mitigate economic impact:

• Approximately 4.8 trillion KRW allocated for direct support to lower-income households
• Cash payments ranging from 100,000 to 600,000 KRW per individual
• Additional supplementary budget discussions totaling approximately 26.2 trillion KRW to address broader energy and economic shocks

These measures aim to stabilize domestic consumption and offset external economic pressures.

The continued strength of the U.S. dollar remains a dominant macro factor.

Drivers include:

• Global risk-off sentiment
• Capital flows toward safe-haven assets
• Interest rate differentials favoring the United States

This has resulted in sustained depreciation of emerging market currencies, particularly the Korean won.