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China Imports and Exports Surge ahead of Tomorrow’s Signing…

China’s trade surplus widens ahead of tomorrow’s signing. It remains to be seen whether the numbers will catch the President’s eye…
Bob Mason
U.S.-China Trade Relations

Earlier in the Day:

It was a busy day on the Asian economic calendar this morning. Key stats included building consent and business confidence figures out of New Zealand and trade data out of China.

For the Kiwi Dollar

The NZIER Quarterly Survey of Business Survey (QSBO) showed that a net 21% of businesses expect a deterioration in general economic conditions over the coming year. In the 3rd quarter, a net 40% of businesses had expected a deterioration.

  • In the 4th quarter, a net 20% of manufacturers expect worsening economic conditions, improving from 52% in the 3rd
  • Across the services sector, a net 26% of firms expected deterioration in economic conditions. The services sector was the most pessimistic of the sectors in the quarter.
  • Weak profitability left firms cautious over expansion plans, and investments in buildings in particular. A net 10% of firms were looking to reduce investments in buildings in the coming year. By contrast, firms were more positive when it came to hiring in the next quarter.

The Kiwi Dollar moved from $0.66339 to $0.66306 upon release of the figures.

Building consents slid by 8.5% in November, following on from a 1.3% decline in October. Economists had forecast a 2.1% rise.

The Kiwi Dollar moved from $0.66303 to $0.66304 upon release of the figures. At the time of writing, the Kiwi Dollar was down by 0.06% to $0.6627.

Out of China

China’s trade surplus widened from $37.93bn to $46.79bn in December. Economists had forecast a widening to $48bn.

  • Exports rose by 7.6% in December, year-on-year, reversing a 1.3% decline in November. Economists had forecast a 3.2% increase.
  • Imports jumped by 16.3% in December, year-on-year, following on from a 0.5% increase in November. Economists had forecast a 9.6% rise.

The Aussie Dollar moved from $0.68933 to $0.68983 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.09% to $0.6898.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.12% to ¥110.08 against the greenback.

The Day Ahead:

For the EUR

It’s another quiet day ahead on the economic calendar, with no material stats due out of the Eurozone to provide the EUR with direction.

The lack of stats will continue to leave the EUR in hands of geopolitics.

It’s all about the phase 1 trade agreement for now.

At the time of writing, the EUR was up by 0.04% to $1.1138.

For the Pound

It’s also a quiet day ahead on the economic calendar. There are no material stats to provide the Pound with direction.

The lack of stats will leave Brexit chatter to influence on the day Britain’s departure date rapidly approaches.

On the monetary policy front, dovish chatter from BoE MPC members and yesterday’s disappointing stats will test the Pound.

At the time of writing, the Pound was up by 0.04% to $1.2994.

Across the Pond

It’s a relatively busy day on the data front, with December inflation figures due out of the U.S later today.

Barring an unexpected pickup in inflationary pressures the numbers are unlikely to have a lasting impact on the Dollar.

The focus in the early part of the week will remain on geopolitics as the U.S and China ready to sign the phase 1 trade agreement on Wednesday.

Expect any negative chatter to rattle the markets…

The Dollar Spot Index was up by 0.03% to 97.379 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats scheduled for release to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment and influence on crude oil prices.

Trade data out of China in the early part of the day and the signing of the U.S – China phase 1 agreement tomorrow are positives.

The Loonie was up by 0.02% to C$1.3055 against the U.S Dollar, at the time of writing.

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