Korea's October rate cut call likely to get delayed

In a 5 October press release from the MOSF (link), Korean government noted that the factors coupled with the supplementary budget and consumption promotion measures, may have resulted in stronger retail sales in September. 

"In the framework, a significant undershoot is expected in Q3 GDP growth (below 1%) to trigger further easing in October when the BoK releases its revised economic outlook. That now looks unlikely. As such, rate cut forecast is pushed back from this Thursday (15 October) to later in Q4, most likely in November", states Barclays. 

A key factor is the stronger than expected stabilisation in consumption after the MERS outbreak, as well as recent signs of improvements in confidence and consumption-linked activity indicators. In particular, the rebound in tourism and real estate indicators (house transactions and construction activity) has also been stronger than expected.