Morgan Stanley analytics forecast the economy will return to pre-crisis levels by the fourth quarter. Here’s why.
South Korean exports decelerate in December
In December, South Korean exports surged less than in November. It could be explained by softening demand from key economies led by China. That’s what a Reuters poll uncovered on Wednesday.
According to the median estimate from 10 market experts, from 2017 there was a 3.3% ascend in exports, which is below a 4.1% leap recorded in November as well as below a 6.2% jump for the first 11 months of 2018.
In December, the country’s imports added by 4.2% from 2017, which is steeply down from the previous month’s 11.5% rally.
If December exports match the survey poll, there will be a 5.9% leap for the year, which appears to be below last year’s jump of 15.8%.
Moreover, the South Korean finance ministry suggests export surge will speed down to 3.1% in 2019.
Market experts pointed out that recent dives in prices of the country’s major export items, including memory chips as well as oil products, could potentially provoke an annual tumble in export value early in 2019.
Diving semiconductor prices along with global crude prices could generate contraction in the country’s exports in the first quarter, as some experts suggest.
As a matter of fact, South Korea turns out to be the world's number one exporter of microprocessors, and also a key source of ships, vehicles as well as petroleum products. What’s more, South Korea happens to be the first key exporter to post monthly trade data that gives the first outcome of global trade conditions.
For the first 20 days of this month, the country’s overseas sales of memory chips headed south by about 9.8% from 2017, as follows from customs agency data uncovered earlier.
The previous month, the country’s exports to its key trade partner, China went down for the first time since October 2016, while chip exports tacked on the least since November 2016.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.