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The latest confirmation that global trade is suffering its gloomiest period since the financial crisis, if not outright depressionary as we pointed out two months ago...
... came overnight from Asia, where first global trade hub Singapore delivered some shockingly bad news about the state of its economy, followed shortly by the latest disappointing Chinese exports report.
Warning - Shot - Economy - Singapore - Gross
The first warning shot to the global economy came from Singapore, where Gross domestic product in the trade-reliant city state declined an annualized 3.4% in the second quarter, a plunge from 3.8% in Q1 and far below the 0.5% consensus estimate. This was the biggest drop since 2012.
"I thought the numbers would be bad, but this is ugly,” said Chua Hak Bin, an economist at Maybank Kim Eng Research Pte in Singapore. "The whiff of a technical recession is real. We thought it might be shallow, but the risks now is that it might be deeper."
Singapore - World - Trade - Proxies - Reliance
Singapore, which is one of the world's most reliable trade proxies and due to its heavy reliance on commerce and its complicated integration in regional and global supply chains makes it vulnerable to a slowdown in world growth and tariff wars. Exports have already taken a big hit over the past few months, with shipments plunging in May by the most since early 2013; the latest report revealed that the plunge in GDP was largely due to a collapse in electronics shipments.
Manufacturing contracted an annualized 6% in the second quarter from the previous three months. Construction declined 7.6%, reversing a 13.3% expansion in the first quarter. The services industry shrank 1.5% in the second quarter.
Singapore - Canary - Coal - Mine - Chua
“Singapore is the canary in the coal mine, being very open and sensitive to trade,” said Chua Hak Bin, an economist at Maybank Kim Eng Research Pte in Singapore. The data “points to the risk of...
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