Crypto News: Supply Lines: Struggling to get traction

The world's major industrial engines are struggling to emerge from an economic rut.

The lack of traction was evident in new figures from Asia. Data released on Monday showed South Korea's shipments abroad fell 14.2% in April, steeper than economists' expectations for a 12.2% decline.

Korean exports are a bellwether for international trade because the nation sells a lot of essentials for supply chains — like semiconductors, computer monitors and refined oil. Exports of chips dropped 41% last month from a year earlier after sliding 34.5% in March, pointing to still-anemic tech sector demand.

Optimists saw a silver lining: Korea's exports adjusted to smooth out calendar quirks (April 2023 had one fewer working days than the same month last year) fell 10.4% from a year earlier, the smallest decline since December.

China's Slump

China's recovery looks patchy, too, with fresh indicators pointing to a contraction in manufacturing. Purchasing managers' indexes released Sunday showed an unexpected decline in factory activity in April, weighed down by weaker demand for exports.

"The key factory sector is shrinking despite strong government spending and robust demand in pockets of the services industries," Chang Shu and David Qu of Bloomberg Economics wrote in a research note. "Bottom line: The recovery is probably too narrow to be sustainable — and risks losing steam."

Last week, figures released from Vietnam showed exports dropping 17.1% in April from a year earlier, the fifth decline in the past six months.

US and Europe

In the US, a metal manufacturer in Texas said "most customers, when pressed, think the recession will start in summer. We are getting ready for our second layoff in the last four months," according to the latest survey from the Dallas Fed.

America's factory PMI report due out later on Monday may show a sixth straight month of contraction, and the country's April employment report due out later this week is expected to show a third straight month of decelerating employment growth.

The euro area is also flirting with flatlining.

The European Central Bank is expected to raise interest rates by a quarter point on Thursday to get inflation under control, dialing down the pace of tightening as earlier hikes hit the economy with a lag and lingering financial-stability worries dictate caution.

In the UK, inflation has lingered in double digits for seven months, prompting investors to price in more rate hikes in the months ahead.

Additional Reading:

—Brendan Murray in London

Labor supply | Global labor markets are poised for a new era of turbulence as technologies like artificial intelligence accelerate the decline of clerical work, while simultaneously increasing demand for technology and cybersecurity specialists. Over the next five years, nearly a quarter of all jobs will change as a result of AI, digitization and other economic developments like the green energy transition and supply chain re-shoring, according to a report published by the World Economic Forum in Geneva on Monday.

Costly imports | The UK's final post-Brexit border checks will cost food importers hundreds of millions of pounds under the government's own internal estimates, adding to upward pressure on inflation.
Order outlook | Mercedes-Benz said its order backlog will support sales in the coming months in a subdued global economy where demand in Europe is falling behind strong US and Chinese markets. Separately, it's not realistic for the German economy to sever relations with China, according to Mercedes-Benz's CEO.
Chip wars | China's commerce minister voiced concerns about German export restrictions, just hours after it was reported Berlin was considering limiting shipments of chemicals used to make semiconductors.
Pacific peacemaking | Australia's economic and diplomatic relations with China are in recovery mode, with tensions over issues ranging from foreign investment to security receding as Beijing tamps down its punitive efforts to bend one of its key commodity suppliers to its will.
Transatlantic talks | An agreement between the US and the European Union over critical minerals would unlock wider benefits than previously thought, with a deal paving the way to remove several more trade barriers introduced by President Joe Biden's massive green subsidy law.
Across the border | Mexico's economy grew more than expected in the first quarter, as robust remittances stoked domestic consumption and as exports surged to meet strong US demand.

Fast trains | North American railroads topped tepid earnings expectations for the first quarter through pricing power and progress toward running a more fluid network. Most operators seem optimistic the demand picture may improve in the second half of the year, according to Bloomberg Intelligence.
Shorter supply chains | Global solar manufacturing will become increasingly localized as countries step up efforts to boost clean energy production within their own borders, according to the world's largest solar company.
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