The Global 'Canary In The Coal Mine' Is Sick

South Korean exports climbed by just 0.4% year-over-year. Economists were looking for a gain of 2.0%.

Economists across Wall Street dub South Korean exports as the global economic canary in the coal mine.

Korean trade data usually comes before the first trading session of the month in Asia, which makes it the first of the world's major economic indicators to be released.

Because Korea's exports are heavily exposed to China and Japan — the world's second and third largest economies — it is considered to have strong predictive power.

"As regards exports, recent growth data from China – the hub of Asian international trade – have not been great, and so we expect export values to remain relatively subdued," notes the economists at Societe Generale. "That said, given the steep appreciation of the won over the second half of last year, the trade performance has been impressive, supporting our view that notwithstanding the loud complaints from Korean politicians, the economy is dealing just fine with the stronger won. As ever, given the extraordinary timeliness of the Korean trade data, any signal from the release will be projected onto the whole of Asia."

Here's a historical chart and some commentary from Goldman Sachs' Jim O'Neill: