According to the official Bank of Korea release tonight, South Korea’s quarterly expansion matched earlier forecasts for the three month period through March.  For the first quarter, the peninsula economy expanded by 0.9% quarter over quarter – while gaining by 2.8% in the annualized comparison.  Gains were widely buttressed by an increase in corporate investment and government spending.  Corporate spending surged by 10% in the month, helping to offset rather weak personal consumption figures.

With the fact that tonight’s figures widely matched anticipated forecasts, speculation is now leaning towards a 12th consecutive no-change decision in tomorrow’s central bank meeting.  Central bankers are additionally unlikely to commit to a shift in monetary policy as Europe’s financial crisis remains dependent on a Greek vote in two weeks.  Nonetheless, policymakers are likely to note the recent weak export growth, which declined for the third straight month, as the main culprit behind the country’s recent softness.

Short term directional price action in the South Korean won will remain dependent on tomorrow’s debt auction by Spain.  The auction is the first offering since the country’s government released admission of difficulty in accessing global capital markets.

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