The value of Singapore's non-oil domestic exports fell 15.5 percent on the year in June after dropping 14.8 percent in May and rose 5.4 percent on the month after dropping 14.6 percent previously. Imports fell 21.4 percent on the year in June after dropping 20.7 percent in May and rose 3.3 percent on the month after a previous decline of 6.7 percent. The month-over-month increases in trade flows in June is broadly in line with previously published PMI survey data showing solid conditions in the aggregate economy last month.

The weakness in exports on a year-over-year basis was broad-based across categories. Exports of electronics products fell 15.9 percent after dropping 27.2 percent previously, while exports of non-electronic products fell 15.4 percent after a previous decline of 10.7 percent. Exports posted mixed performance across major trading partners. Exports to China recorded a moderate year-over-year increase, exports to Hong Kong rebounded sharply, and exports to the European Union and Taiwan fell at a less pronounced pace. Exports to the United States, however, fell after a previous increase and exports to Japan and South Korea fell at a faster pace.

Singapore publishes monthly data (both in nominal and real terms) for the current and previous two months, cumulative-to-date data on imports and exports by country of origin and destination, as well as monthly seasonally adjusted trade data. Imports refer to goods brought into Singapore irrespective of whether they are for consumption, for processing, for use in manufacturing, or for subsequent re-shipment to other countries/areas. Exports refer to goods brought out of Singapore. They comprise domestic exports and re-exports. Data are also disseminated on imports broken down by country of origin and domestic exports and re-exports broken down by country of destination.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they also affect currency values in foreign exchange markets. However, the foreign exchange impact is muted here given that Singapore’s currency is managed by the central bank.

Imports indicate demand for foreign goods and services in the local economy. Exports show the demand for local goods in countries overseas. Movements in the trade balance directly affect GDP growth because of the Singapore’s dependence on trade. Stronger exports are bullish for corporate earnings and the stock market. The bond market is also sensitive to the risk of importing inflation.

This report also gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.