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Markets too aggressive on Korean rate hikes to come

The Bank of Korea (BoK) left its policy rate at 2.00% today. We believe the economic upswing is well established and that the political pressures on the BoK to hold rates low will probably ease early next year. We now expect a first hike in January. The bigger picture, however, is that the upcoming tightening cycle should be much less aggressive than the markets currently anticipate.

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