Exports out of South Korea jumped 7.1% year-over-year to $US48.1 billion in December, smashing expectations for a 4.8% gain.
“Among the major export sectors, we watched relatively strong performances in the shipbuilding, semiconductors, auto, machinery and chemical sectors, while oil products, mobile phones and display devices were generally weak,” noted Societe Generale’s Suktae Oh.
Oh said that the magnitude of the gains were largely due to base effects. However, the surprise was nevertheless a surprise.
Korean trade data is very sensitive to the economic activity in developed and emerging Asia. It usually comes before the first trading session of the month in Asia, which makes it the first of the world’s major economic indicators to be released. Economists across Wall Street dub South Korean exports asthe global economic canary in the coal mine.
It’s worth noting that the reliability of Korean trade as an economic bellwether has been questionable lately due to volatility in the Japanese yen, the currency belonging to South Korea’s key competition in international trade.
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