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13 Jan 2016
Chinese data shows a clear improvement - SocGen
FXStreet (Delhi) – Kit Juckes, Research Analyst at Societe Generale, notes that the Chinese data do show a clear improvement, even if it’s just for one month.
Key Quotes
“In CNY terms, imports fell by only 4% y/y in December, vs 7.9% expected and exports rose 2.3%. The USD numbers are -7.6% and -1.4%. the import prices are a lot stronger than they look bearing in mind sharply falling import prices, though there’s less of an excuse for the underlying export weakness.
I can’t help wondering however, if the positive response to a bounce in CNY denominated export growth that is a reward for the Yuan depreciation strategy, won’t just encourage more of the same. If a weaker currency pays dividends for China, as it did for others, then chances are, we’ll see more competitive devaluation in the months ahead across Asia.”
China reported a considerably larger than expected trade surplus. In yuan terms, the surplus jumped to CNY382.05 from CNY343.10. The consensus had expected a small decline. The record large trade surplus was recorded in October at CNY393.20 bln.
The larger trade surplus in December was driven by stronger than expected exports. Exports, in yuan terms, rose 2.3%. The consensus was for a 4.1% decline after a 3.7% fall in November. It is the first year-over-year increase since June and only the second positive reading for all of last year. Imports fell 4.0% year-over-year, which is about half of the pace the market expected.
A somewhat different picture emerges if the figures are in US dollars. The trade surplus widened to $60.09 bln from $54.1 bln. It was the fifth largest for 2015. In dollar terms, exports did not rise but fell 1.4%, which was still considerably better than the Bloomberg consensus (-8%). Imports fell 7.6% in dollar terms. This compares with an 8.7% fall in November and expectations for an 11% decline in December.”
Key Quotes
“In CNY terms, imports fell by only 4% y/y in December, vs 7.9% expected and exports rose 2.3%. The USD numbers are -7.6% and -1.4%. the import prices are a lot stronger than they look bearing in mind sharply falling import prices, though there’s less of an excuse for the underlying export weakness.
I can’t help wondering however, if the positive response to a bounce in CNY denominated export growth that is a reward for the Yuan depreciation strategy, won’t just encourage more of the same. If a weaker currency pays dividends for China, as it did for others, then chances are, we’ll see more competitive devaluation in the months ahead across Asia.”
China reported a considerably larger than expected trade surplus. In yuan terms, the surplus jumped to CNY382.05 from CNY343.10. The consensus had expected a small decline. The record large trade surplus was recorded in October at CNY393.20 bln.
The larger trade surplus in December was driven by stronger than expected exports. Exports, in yuan terms, rose 2.3%. The consensus was for a 4.1% decline after a 3.7% fall in November. It is the first year-over-year increase since June and only the second positive reading for all of last year. Imports fell 4.0% year-over-year, which is about half of the pace the market expected.
A somewhat different picture emerges if the figures are in US dollars. The trade surplus widened to $60.09 bln from $54.1 bln. It was the fifth largest for 2015. In dollar terms, exports did not rise but fell 1.4%, which was still considerably better than the Bloomberg consensus (-8%). Imports fell 7.6% in dollar terms. This compares with an 8.7% fall in November and expectations for an 11% decline in December.”