South Korea November exports plunge as China-U.S. deal still in dark

By Choonsik Yoo and Joori Roh

SEOUL (Reuters) – South Korean exports in November fell for the 12th month in a row and far more than expected, denting hopes for the global manufacturing sector stabilizing as a much-awaited China-U.S. trade deal is still in darkness.

Exports declined 14.3% in November from a year earlier, trade ministry data showed on Sunday, far below a median 10.2% fall tipped in a Reuters poll and missing even the worst forecast in the survey of an 11.1% loss.

It was also the second-worst drop in overseas sales in nearly four years as global semiconductor prices failed to turn around while China, the country’s biggest export market, continued to cut down purchases from its smaller neighbor.

The surprisingly weak November data from a manufacturing powerhouse, which reports monthly trade data ahead of major exporting nations each month, underscores the global economy still far from a turning point.

“The optimism for the first-phase trade deal between the United States and China will take time before actually boosting exports, and today’s poor data means the turnaround in exports is taking longer than expected,” said Chun Kyu-yeon, economist at Hana Financial Investment.

Shipments to China fell 12.2% in November from a year earlier, while overseas sales of semiconductors, South Korea’s top export item, tumbled by 30.8% in value as prices plunged this year from a super-rally last year.

Imports fell 13.0% on-year in November, also missing an 11.9% contraction tipped in the survey. That brought the November trade balance to a $ 3.37 billion surplus, versus a $ 5.34 billion surplus a month earlier.

Sunday’s data left shipments for the first 11 months of this year 10.7% below a year earlier, putting the country on track for its worst annual exports performance since a 13.9% fall in 2009 during the height of a global financial crisis.

South Korea’s economy, the fourth-largest in Asia and heavily dependent on exports, has been hit especially hard by cooling global trade and a prolonged tariff war between China and the United States.

On Friday, the central bank trimmed its 2019 economic growth forecast for the fourth time this year to the lowest in a decade, and also lowered next year’s forecast.

The downgrades came even after the Bank of Korea cut rates twice this year, the most recent cut coming in October. Many analysts expect the central bank to ease policy further next year to support the stuttering economy.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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North Korea urges US to drop hostile policy if it wants to continue dialogue

KCNA reports

Adds that North Korea says it will not offer anything for Trump to brag about in the meantime. This just adds to the bit-part rhetoric from last week here.

The relationship between the two sure looks like anything but amicable right now.
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More weak exports data, this time from South Korea

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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North Korea fires projectiles off east coast​, South Korea says

North Korea halts peace talks with South Korea

Seoul, South Korea — North Korea fired two unidentified projectiles off its east coast on Saturday morning, South Korea’s military said, just a day after the North threatened to remain America’s biggest threat in protest of U.S.-led sanctions on the country.

South Korea’s Joint Chiefs of Staff said in a statement that the launches were made from the North’s northeastern Hamgyong province on Saturday morning.

The statement said South Korea’s military is monitoring possible additional launches by North Korea. But it gave no further details such as exactly what type of projectiles North Korea launched.

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The Japanese government said North Korea appears to have fired missiles, but they caused no damage and did not land in Japanese territorial waters.

The launches came after the U.S. and South Korea ended their regular military drills earlier this week. North Korea called the drills an invasion rehearsal and conducted a series of missile and other weapons tests.

North Korea’s foreign minister said Friday his country will try to remain “America’s biggest threat” if the U.S. continues to confront the North with sanctions. Foreign Minister Ri Yong Ho also called U.S. Secretary of State Mike Pompeo a “poisonous plant of American diplomacy” and vowed to “shutter the absurd dream” that sanctions will force a change in Pyongyang.

Ri’s blistering rhetoric and the projectile launches may dim the prospect for an early resumption of nuclear negotiations between the countries. The top U.S. envoy on North Korea, Stephen Biegun, said Wednesday that Washington was ready to restart the talks, a day after the U.S.-South Korean military drills ended.

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North Korea says Kim Jong Un oversaw test firings

North Korean media reported that leader Kim Jong Un supervised Saturday’s launch of a new weapons system, hours after President Trump said Kim had written him a letter with a “small apology” for the recent missile tests. South Korean media said Saturday that North Korea fired two more unidentified projectiles into East Sea.

“In a letter to me sent by Kim Jong Un, he stated, very nicely, that he would like to meet and start negotiations as soon as the joint U.S./South Korea joint exercise are over. It was a long letter, much of it complaining about the ridiculous and expensive exercises,” Mr. Trump wrote on Twitter Saturday morning. 

North Korea’s Foreign Ministry in a separate statement on Sunday blasted South Korea for continuing to host military drills with the United States, and said that its future dialogue will be held strictly between Pyongyang and Washington and not between the Koreas.

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South Korea’s military said the North on Saturday fired what appeared to be two short-range ballistic missiles. It said they flew about 248 miles before landing in waters between the Korean Peninsula and Japan. 

KCNA picture of North Korean leader Kim Jong Un guiding the test firing of a new weapon
North Korean leader Kim Jong Un guides the test firing of a new weapon, in this undated photo released on August 11, 2019 by North Korea’s Korean Central News Agency (KCNA).  KCNA / REUTERS

Kim expressed “great satisfaction” over the launches, which Pyongyang’s Korean Central News Agency said verified that the new weapon system performs as designed. The official Rodong Sinmun newspaper published several photos that showed Kim watching from an observation post and what appeared to be a missile soaring from a mobile launcher. 

The agency didn’t specify whether the weapons were ballistic missiles or rocket artillery, but said they were developed to suit the North’s “terrain condition” and provide “advantageous tactical character different from existing weapons systems.”

Kim Dong-yub, an analyst at Seoul’s Institute for Far Eastern Studies, said that North Korea’s photos and South Korea’s flight data of the launches suggest that the North tested a new weapon system that is different from the short-range ballistic missiles it repeatedly fired in recent weeks.

South Korea’s military had described the previous missiles as similar to the Russian-made Iskander, a solid-fuel, nuclear-capable missile that is highly maneuverable and travels on low trajectories, improving its chances of evading missile defense systems.

North Korea’s fifth round of weapons launches in less than three weeks was seen as a protest of the slow pace of nuclear negotiations and continuance of the U.S.-South Korea military drills the North claims are an invasion rehearsal.

Experts say Mr. Trump’s downplaying of the North’s launches allowed the country more room to intensify its testing activity while it seeks to build leverage ahead of a possible resumption of negotiations. Talks have stalled since the collapse of Mr. Trump’s second summit with Kim in Vietnam in February over disagreements on exchanging sanctions relief and disarmament, although Mr. Trump made a historic trip into North Korea after the G20 conference in June. 

By launching a slew of weapons that directly threaten South Korea but not the U.S. mainland or its Pacific territories, North Korea also appears to be dialing up pressure on Seoul to make stronger efforts to coax major concessions from the United States on Pyongyang’s behalf.

North Korea in recent months has ignored the South’s calls for dialogue while demanding that Seoul turn away from Washington and resume inter-Korean economic cooperation held back by U.S.-led sanctions against the North.

In a statement released through KCNA, Kwon Jong Gun, director of the U.S. affairs department at Pyongyang’s Foreign Ministry, criticized South Korea for raising concerns over the North’s recent testing activity while continuing the drills with the U.S.

The North also on Saturday lashed out at South Korea’s recent acquisition of U.S.-made F-35 fighter jets and other plans to expand its military capabilities, saying that the South will gain “nothing but destruction” if it pursues a contest of strength with the North.

“Though we are to enter into a dialogue in future as the currents flow in favor of dialogue, (the South) had better keep in mind that this dialogue would be held strictly between the D.P.R.K and the U.S., not between the North and the South,” Kwon said, referring to North Korea by its formal name, the Democratic People’s Republic of Korea.

“Given that the military exercise clearly puts us as an enemy in its concept, (the South) should think that an inter-Korean contact itself will be difficult to be made unless they put an end to such a military exercise or before they make a plausible excuse or an explanation in a sincere manner for conducting the military exercise,” Kwon said.

South Korea has said North Korea’s recent launches could hurt efforts to stabilize peace on the Korean Peninsula and called for the North to uphold an agreement to form a joint military committee to discuss reducing tensions, which was part of an inter-Korean military agreement reached last year.

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North Korea have fired off more missiles (Saturday morning)

North Korea have fired off another round of ballistic missile tests Saturday morning NK time.

  • at least two short range missiles fired into the sea
  • off the NK east coast, Hamhung area

North Korea tested ballistic missiles earlier this week also. North Korea have been firing them quite regularly ever since the June 30 meeting between North Korean dictator Kim Jong Un and US President Trump. 

North Korea have fired off another round of ballistic missile tests Saturday morning NK time.

While this is a yen positive (rising geopolitical tensions prompt flows to liquidity) the market has become a bit jaded with the regular tests. 

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North Korea fires more projectiles, South Korea says

South Korea’s military said Saturday that North Korea fired two more unidentified projectiles into East Sea, Yonhap reported. North Korea has launched short-range missiles at least four other times since July 25 as the U.S. and South Korea prepare joint military exercises.

South Korea’s Yonhap news agency reported Saturday that Seoul’s Joint Chiefs of Staff said the projectiles were launched from an area near the North’s east coast. It didn’t immediately identify the projectiles or how far they flew, but North Korea has unleashed a series of test firings of short-range ballistic missiles in recent weeks.

The North Korean missile tests, which Donald Trump has repeatedly played down, come amid stalled diplomatic talks with the U.S. on the North’s nuclear program. So far, North Korea has stuck by its unilateral suspension of nuclear and long-range missile tests, which came during a diplomatic outreach to Washington last year. 

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The North described recent test-firings as a new rocket artillery system and short-range ballistic missile launches. It previously called them a “solemn warning” to South Korea over its plans to continue military drills with the U.S. Experts say the North’s weapons display could intensify in the coming months if progress isn’t made on the nuclear talks.

On Friday, Mr. Trump said he received another “beautiful letter” from North Korean leader Kim Jong Un and hinted there would be another meeting between them. Mr. Trump made a historic trip into North Korea with Kim in June. 

In an interview with Fox News after the first missile launch, Mr. Trump said he was “getting along well” with Kim and said the country “really haven’t tested missiles other than smaller ones.”

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North Korea says missile launches were warnings against U.S.-South Korea military exercises

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South Korea second-quarter GDP bounces as public spending offsets private sector drag

© Reuters. FILE PHOTO: People look at a view of central Seoul from an observatory platform in Seoul © Reuters. FILE PHOTO: People look at a view of central Seoul from an observatory platform in Seoul

By Choonsik Yoo and Joori Roh

SEOUL (Reuters) – South Korea’s economy swung back to growth in the second quarter, dodging a technical recession, although the expansion was mostly driven by government spending, suggesting the central bank may need to cut rates again to stoke demand.

Gross domestic product grew by a seasonally adjusted 1.1% in the April-June period from the first quarter, central bank estimates showed, just beating the median forecast of 1.0% growth tipped in a Reuters survey of 12 economists.

However, the Bank of Korea estimates showed the economy would have contracted without increased government spending, following previous quarter’s surprise contraction.

“Details of the GDP data confirmed the economy has been dependant on government spending and support my expectation of another interest rate cut in the fourth quarter,” said Park Sang-hyun, economist at HI Investment & Securities.

Heavily reliant on exports of chips, smartphones, autos and ships, South Korea’s economy has been hit especially hard by the year-long China-U.S. trade dispute, which has hurt supply chains and global growth.

BOK estimates showed government spending contributed 1.3 percentage points to second-quarter GDP while private-sector activity presented a 0.2 percentage point drag as companies slashed investment due to the uncertain outlook.

Last week, the BOK cut interest rates for the first time in three years, earlier than market expectations for a cut in August, and trimmed its 2019 economic growth forecast to a decade low of 2.2% from the previous 2.5%.

South Korea’s economy shrank 0.4% in the first quarter due to delays in government spending as private investment also slowed.

On a year-on-year basis, Asia’s fourth-largest economy expanded 2.1% in the second quarter, compared with 2.0% growth forecast in the poll and 1.7% growth in the first quarter, the central bank estimated.

Merchandise exports returned to growth of 2.3% in the April-June period after a 3.2% contraction in the first, which was the worst reading since the final quarter of 2017.

But export prospects remain uncertain as Japan has curbed chip and display production materials shipments to South Korea, which Seoul says is related to a diplomatic row over compensation of forced labor during World War Two.

The BOK said in a report to parliament on Tuesday that Japan’s export curbs were one of the top three risks to the domestic economy. Governor Lee Ju-yeol added that this year’s growth could dip further due to the curbs.

Analysts have downgraded their forecasts for 2019 growth, with some seeing growth falling short of 2%.

(This story corrects first bullet of Q2 GDP quarterly figure)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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South Korea fin min says monitoring if any herd behaviour in FX market. Moo.

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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