Asia Economics & Strategy Daily: Strategy Comments; CN Chart Pack; Auction Preview; IN Fiscal; US Midterm Elections

Korean money market conditions have shown signs of tightening, with 3m CP yields rising above 3y KTB yields for the first time since Feb 2026. While 3y KTB yields have eased from their previous peak, 3m CP yields have continued to climb, reflecting a combination of heightened interest rate uncertainty, weaker risk appetite and year-end liquidity considerations. Notably, 3m CD rates have increased much less sharply than CP rates, suggesting that funding pressure is concentrated in the corporate and non-banking funding markets rather than in bank funding markets. This divergence points to a widening corporate funding premium, rather than a broad-based increase in short-term funding costs across the financial system. For the broader Korean rates market, the development raises the risk of a tightening in short-term funding conditions beyond what is implied by the BoK policy outlook alone. On China, growth momentum improved in 3Q26 with resilient external demand, rebounding direct investmen