Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
The recent recovery in manufacturing sentiment has stalled in recent months. The BoK survey for the sector dipping to 69 from 72 for the headline August print. The chart below shows the headline index is still above Q1 lows, but is still fairly depressed from an historical standpoint. If current levels continue to hold, it suggests only a modest uplift in y/y GDP growth momentum. Earlier in the week we had the Q2 GDP update, which showed 0.9% y/y growth, which was slightly better than forecast.
- The detail showed a pull back across expected domestic sales and new orders also slipped. Most indices remain within recent ranges though. The seasonally adjusted reading for the manufacturing sector rose to 71 from 69, a slightly more positive result, but is only back to levels that prevailed at the start of the year.
- Profit expectations also slipped, back to 76 from 81.
Fig 1: South Korean Manufacturing Sentiment & South Korean Y/Y GDP
Source: MNI - Market News/Bloomberg/BoK
- Manufacturers export expectations firmed a touch, but at 66 remains well within recent ranges. The second chart below overlays these expectations against y/y export growth. Again, it isn't suggesting a sharp rebound in export growth. Next Tuesday delivers July trade data.
- On the non-manufacturing side, sentiment also eased to 76 from 78 prior. This unwinds some of the recent improvement in the series, but we remain above Q1 lows of 70 for the sentiment gauge.
Fig 1: South Korean Manufacturers Export Forecast & South Korean Exports Y/Y
Source: MNI - Market News/Bloomberg/BoK
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.