China: Exports were less robust and imports more - BBH

China reported August trade figures and it showed that exports were less robust and imports more, leading to a narrower trade surplus, explains the analysis team at BBH.  

Key Quotes

“Export growth slowed to 5.5% from 7.2% (expectations ~6.0%).  Imports accelerated to 13.3% from 11.0% (expectations ~10%).  The trade surplus fell to $42 bln from $46.7 bln.  Exports to the US are up 8.4% from a year ago to $39.2 bln.  Its bilateral trade surplus of $26.2 bln is the largest in two years.  China reports August CPI and PPI Saturday, which are expected to rise 1.7% y/y and 5.7% y/y, respectively.  PBOC is targeting 3% inflation this year.”        

“The dollar fell 1.5% against the yuan this week.  The dollar has not fallen 1% or more in a week against the yuan in over a decade, and now it has done it for two back-to-back.  It is the third consecutive weekly decline.  In fact, here in Q3, the yuan has fallen in only two weeks.  The US dollar bottomed against the yuan in early 2014 near CNY6.04.  It peaked at the end of last year near CNY6.9650.  It shot through CNY6.50 this week, which is the 50% marker.  The 61.8% retracement objective is seen by CNY6.39.”