June 2nd, 2008

KRW: May trade balance in surplus and CPI at 4.9% vs 4.3%, spot broke from 1026 to 1022

South Africa

8.4% c/a deficit in Q1

10bn ZAR in May shows will continue int Q2; negative trend should turn on higher commodity prices, weaker ZAR and domestic slowdown

Rate differential attractiveness is lower off of lower commodity prices, trade data, and global stagflation fears as EUinflation at 3.6%

Latest media reports on Reliance/MTN indicate may do a share swap in which case would have no cash inflows

Reserves data on Friday morning,

Big events this month = 12Jun SARB decision and 18Jun NERSA decision on electricity tariff hike

with all the negative data market would be more concerned about detrimental effects of rate hikes vs. differential vs. USD

ZAR always more in tune with general risk sentiment as c/a deficit is financed by portfolio equity inflows

Thailand

Cabinet Minister Jakrapob resigned after allegations of insulting the King