Exports contract for a fourth month
Data released at the weekend showed China’s exports fell 1.1% y/y in November, the fourth consecutive month of negative growth. It is evident that the 18-month tariff was with the US is taking its toll on China’s export sector and could imply that they may be more ready to get a Phase 1 deal signed off as soon as possible. That might be construed as positive for risk, but the headline data is dominating sentiment for the time being.
Imports came in better than expected, rising 0.3% y/y versus the -1.8% expected and as a result the trade surplus narrowed to $38.7 billion. The Australian dollar was buoyed by the US payrolls data but has started the week in the red after the poor China trade data. The weak imports growth being one of the driving forces. The 55-day moving average looks poised to rise above the 100-day moving average at 0.6810 for the first time since February 8.
AUD/USD Daily Chart
Equities stutter after payrolls rally
US equity indices were on the defensive during today’s Asian morning session after posting significant gains on Friday. US markets were down between 0.14% and 0.16% while the China A50 index lost 0.55% after the disappointing exports data at the weekend. That was the first negative day in five days and halted the index’s recent rally just short of the 55-day moving average at 13,859.
China A50 Daily Chart
Fed on hold for longer
Friday’s stellar payrolls data virtually consigned this…