Singapore's trade data predicted to edge up to 1.9%

Is recovery finally underway?

According to DBS, trade figures out tomorrow morning will turn out mixed. The headline number will likely show an improvement to 1.9% YoY, up from a contraction of 4.8%. 

While this will surely attract the bulk of the limelight, the point is that some easing is expected and it’ll be reflected by the month-on-month number.

Here's more from DBS:

The sequential figure is expected to show moderation to 4.6% MoM sa, from 8.0% previously.

But this does not necessary point to any deterioration in outlook or a decline in competitiveness.

Essentially, the previous month (March) number is mainly a technical rebound from the seasonal slump in February.

Call it making up for lost time if you want but the point is that the previous surge is transient and it does not truly reflect the underlying economic conditions.

As we’ve noted several times in the past, the high frequency data will only become more indicative of the fundamentals from April onwards.

And what it shows will likely be consistent with our long held view, that a normalisation/recovery process is underway, albeit a sluggish one.

Indeed, economic data from the developed economies and Asia have been mixed thus far. That implies a tepid global growth momentum. And this will likewise have the same effect on Singapore’s export and growth performance in the coming months.