Don't expect a quick rebound in Asian trade: analysis

Mid-May already, but things still wobbly.

It has been noted that it’s already mid-May, and things still look pretty wobbly across Asia.

According to a research note from HSBC Global Research, the Lunar New Year always throws things off early in the year, so veteran investors know to treat first quarter data with kid gloves.

However, the analysis said that things haven’t improved since. PMIs, with the exception of Vietnam’s, have slid further.

Here's more from HSBC Global Research:

Hard data, too, has turned even softer in April. Take exports. Shipments from China, Korea, and Taiwan – the region’s bellwethers for the global industrial cycle – declined by over 8% y-o-y last month.

That’s after nearly a 10% contraction the previous month. Punchy. What’s going on? Is the bottom falling out of global demand?

Well, not quite. But things are decidedly soggy everywhere. In fact, even if we take into account the slumping euro over the last few months, which distorted Asian trade data, there are signs that the region’s exports are facing structural challenges.

These aren’t necessarily, as often claimed, due to soaring wages in China. Rather, the issue is that import demand in the West has failed to fire up.

And that’s not something that will disappear overnight. So, don’t look for a quick rebound in Asian trade, or in growth more broadly.