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13 Apr 2015
Chinese exports might rebound in April - Danske
FXStreet (Barcelona) - Senior Analyst at Danske Bank, Flemming J. Nielsen, reviews today’s Chinese trade balance data release, and further explains that the disappointing contraction in surplus was only seasonal, and the surplus will likely exceed USD40bn in April.
Key Quotes
“The foreign trade data for March were weaker than expected. Exports (in USD) in March contracted 15.0% y/y after surging 48.3% y/y in February, while imports contracted 12.7% y/y after contracting 20.5% y/y in February.”
“The foreign trade surplus plunged to just USD3.1bn in March from USD60.6bn in the previous month.”
“The sharp contraction in exports in March in our view mainly reflects distortions from the relative late Chinese New Year public holiday in February.”
“China’s export growth should rebound to the 5-7 % y/y range in April and the trade balance surplus will probably again exceed USD40bn.”
“It remains our view that the current weakness in the Chinese economy is primarily driven by weaker domestic demand and only to a lesser degree by weaker exports. This is likely to be reflected in continued subdued import growth with declining import prices also weighing substantially on import growth.”
“Policy-wise we expect more monetary easing but we do expect China to start targeting a weaker CNY to support growth.”
Key Quotes
“The foreign trade data for March were weaker than expected. Exports (in USD) in March contracted 15.0% y/y after surging 48.3% y/y in February, while imports contracted 12.7% y/y after contracting 20.5% y/y in February.”
“The foreign trade surplus plunged to just USD3.1bn in March from USD60.6bn in the previous month.”
“The sharp contraction in exports in March in our view mainly reflects distortions from the relative late Chinese New Year public holiday in February.”
“China’s export growth should rebound to the 5-7 % y/y range in April and the trade balance surplus will probably again exceed USD40bn.”
“It remains our view that the current weakness in the Chinese economy is primarily driven by weaker domestic demand and only to a lesser degree by weaker exports. This is likely to be reflected in continued subdued import growth with declining import prices also weighing substantially on import growth.”
“Policy-wise we expect more monetary easing but we do expect China to start targeting a weaker CNY to support growth.”