Photo: Wikimedia Commons
Goldman Sachs considers Korean trade data to be Asia’s “canary in the coal mine” due to its high correlation to economic activity in mainland Asia.Unfortunately, the canary is looking sick.
South Korean July exports plunged 8.8 per cent from a year ago. Economists surveyed by Bloomberg were looking for a decline of 3.7 per cent.
This disappointing number comes as global PMI data shows that deterioration in the world’s manufacturing sectors.
Jim O’Neill, Chairman of Goldman Sachs Asset Management has previously argued that PMI and South Korean trade data were among the most reliable economic indicators in the world.
So, there’s not much good news coming from the Asian economies. At this point, it seems the data is increasingly justifying further easy monetary policy measures from local central banks.