South Korean IP likely to have rebounded in June

South Korean June trade data showed a sizeable rebound in exports, and a part of this rebound can be attributed to an increase in production after adjusting for seasonality and differences in working days. 

"South Korean Industrial production is likely to have rebounded in June after a sustained decline since March", says Societe Generale. 

Exports and industry data suggests that semiconductors, auto and metal sectors will lead the overall gains in industrial production, while the other two key sub-sectors in the electronics industry, display and mobile phones, are likely to have contracted.

The rebound in industrial production in June should be favourable news for Q3 growth momentum. But we would remain cautious about the near-term growth outlook.

"The forecast of 1.5% mom may just be a technical rebound after a cumulative decline of 2.8% for the previous three months and the interim data until 20 July indicates that exports may decline again in July", added Societe Generale.