Chart of the Day: NODX eases on weaker external demand

Plain and simple, risk is on the downside, says DBS Group Research.

DBS Group Research noted:

July non-oil domestic export (NODX) due this week is the first set of economic data for the second half. While it should provide a glimpse of what lies ahead for the second half of the year, the problem is base effect probably distort the picture. Exports sales were weaker than usual in the same period last year and that will prop up the headline number.

However, the sequential number, a better reflection of the present state of the matters, is expected to point to 1-2% MoM sa drop. And much will also depend on where pharmaceutical sales will be heading. This sector is currently on a production run.

Surges in production output and export sales of pharmaceutical products have already skewed the overall numbers in June and it may well do so again in July.

Nonetheless, against the backdrop of deteriorating data from around the globe, it’s hard to imagine that Singapore’s export data will buck the trend. Global PMIs are turning southwards while key markets such as US, Europe and China are reporting weaker than expected growth. So plainly, risk is on the downside.