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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.
SOUTH KOREA
South Korean July trade figures were slightly weaker than expected. Export growth came in at -16.5%, versus -15.0% projected. This was also a down step from last month's -6% outcome. On the import side we were -25.4% y/y, versus -25.0% forecast and -11.7% prior. This left the trade surplus at $1630mn, versus a $2600mn forecast.
- Further meaningful improvement in the trade position may be difficult to come by. The Citi terms of trade proxy for South Korea hasn't improved further in recent months, which is in line with global energy prices finding a base over this period.
- The first chart below overlays South Korea's trade position against this ToT proxy. Energy imports are down nearly 50% in y/y terms, but if we see further stability/modest upside in global energy prices, this slump is unlikely to continue.
Fig 1: South Korea's Trade Position Versus Citi's South Korea ToT Proxy
Source: Citi/MNI - Market News/Bloomberg
- On the export side, semiconductor shipments remained deeply negative in y/y terms down -34%. Oil related export products also fell sharply, down -42% y/y. Exports to China remained negative.
- The won is back into positive territory versus the USD in y/y terms, which is a stronger read than implied by still weak export growth, see the chart below.
Fig 2: KRW/USD Y/Y Versus South Korean Export Growth
Source: MNI - Market News/Bloomberg
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.
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