Dünya Executive - - DATA -

► Core trade balance (exclud ng gold and energy) s n surplus accord ng to October data. The $2.9 b ll on core surplus has brought the 12-month (annual) core def c t down to $18.5 b ll on, the lowest s nce March 2010. The monthly fall n annual def c t was huge: $5.9 b ll on.

► Accord ngly, the export/ mport coverage rat o jumped from 88.29 percent n September to 97.18 percent n October. The same rat o was 57.77 percent n January 2018. The rate of rebalanc ng s fast and ts mpact s large.

► Th s s mportant because the share of manufactur ng n exports stands at 93.7 percent. Industr al product on has to go on f only for the sake of exports. Otherw se, rebalanc ng could turn nto a free fall.

► We aren’t there yet but too much of a good th ng sn’t good. Hence, I expect a current account def c t of $35 b ll on th s year to fall slowly further n H1 2019 to below $30 b ll on. Then, f my ‘automat c bu lt- n react on’ scenar o comes true or f there s a sea-chang ng econom c program after the local elect ons, the core trade balance should w den aga n n H2 2019 when domest c demand m ght p ck up gradually.

► Of course, most of t comes from the sharp contract on n mports. Head on f gures d splay a 23.8 percent yearon-year contract on n mports whereas exports rose by 13 percent. Core balance h nts at 30 percent contract on n mports. The contract on s both sharp and mass ve, and shows that near-recess on s already n the cards to say the least.

► Import contract on thus far hasn’t yet affected exports, wh ch are head ng north desp te the d sadvantage­ous EUR/USD par ty. Nonetheles­s, the downward trend s far steeper than env saged a few months ago, and m ght constra n export capac ty n the com ng months. All n all, the annual trade balance s already at $67.2 b ll on. In October 2011, the trade balance reached $106.7 b ll on. Th s was the peak def c t level after Lehman.

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