Taiwan's foreign trade to drop back to a deeper contraction

The implied growth rates of Taiwan's trade mom seem too strong to remain persistent against a backdrop of falling orders and production. 

And the Ministry of Finance put "increase in working days" in its press release as one reason for the May strength. June PMI reports across Asia suggest deteriorating activity and demand in the region. Moreover, the improvement in Korea trade in June is mainly due to a technical factor rather than stronger fundamentals.

"Therefore, Taiwan's export growth is expected to have deteriorated again to -9% yoy in June, a combination of a correction of the previous month's strength and weak external demand. Import growth is likely to have fallen back to deep contraction as well, given a strong negative base effect and cooling investments", says Societe Generale.