South Korea's exports likely continued their downtrend in May

South Korea will release May trade data on 1 June. Exports are expected to have dropped for a fifth consecutive month by 11.0% y/y, more than the 8.1% drop in April. 

Exports fell 7.8% y/y in the first 20 days of May, despite the same number of working days as last year. The last 10 days of the month likely saw an even further drop because of the holidays. 

China's trade data has weakened for a third consecutive month, and therefore the drag on Korea's exports is expected to continue. 

The strength of the Korean won against the Japanese yen and the euro has limited exports to Japan and the euro area: exports to the euro area fell 11.8% and exports to Japan 12.4% in April. Imports likely continued to fall on lower oil prices. 

"We expect a trade surplus, owing to the larger drop in imports rather than an increase in exports",says Standard Chartered.