China Trade Surplus

Bank Stocks, Dollar Slide Hit By Fresh Tax Reform Doubts

U.S. equity futures are little changed as European and Asian shares retreated, led by sliding bank stocks and a drop in the dollar as doubts over republican tax cuts and ongoing bond curve flattening hurt sentiment and prompted fresh questions over the viability of the US expansion.

China Trade Surplus Crashes As Exports & Imports Collapse In March

Forget the weather, it must be the smog. China just announced total carnage in its trade data for March:

CHINA'S MARCH IMPORTS FALL 12.3% Y/Y IN YUAN TERMS; EST. -11.3%
CHINA'S MARCH EXPORTS FALL 14.6% Y/Y IN YUAN TERMS; EST. +8.2%
CHINA'S MARCH TRADE SURPLUS 18.16 BILLION YUAN; EST 250B YUAN

So what exactly was the Chinese stock market 'discounting'?

Fake Chinese Trade Data Pushes Fake US Futures Higher

Overnight, just as Japan was threatening to roll risk over even more (at the end of the day, or rather night, it did, sliding over 200 point bringing the two day total plunge to nearly 800 points) China reported trade numbers which were "better than expected" even though the net GDP contribution from the overall surplus was actually less than expected at $17.8 vs $27.1, which in turn pushed US futures solidly into the green. Ironically, while the China data was enough to give the US a solid green momentum it was not enough to give the China market a green close. Recall that this is the same data that forced Goldman to admit in January that "China is cooking the books"... the same data that prompted a Bank of America report analyzing the Chinese data to say the following: "One important question in investors' mind is whether we can trust the quality of these trade statistics because they seemed to be significantly distorted between October 2012 and April 2013.... we believe the quality of trade data was improved a lot. Using our adjustment method for fake trade..." Of course BofA "believes it", and it is only fitting: fake Chinese trade data to push the fake US stock market higher.

China Trade Surplus Unexpectedly Rises As Non-EU/US Imports Spike; Crude Imports Relentless

In keeping with the theme of everything decoupling from everything else these days, a comparable decoupling pattern could be observed in China's December trade data, which experienced a surprising jump in its trade surplus from $14.5 billion in November to $16.5 billion in December, even if exports broadly slowed down and grew at the slowest pace in 10 months. This number was quite odd as it represents almost double the consensus forecast $8.8 billion, predicated by a matched slow down in imports which were up only 11.8% Y/Y, the smallest rise since the October 2009 decline of 6.4%. The odd jump in the trade surplus appeared at a time when many were expecting that the slowing Chinese economy would be well on its way to shifting from surplus to deficit, leading to a devaluation of the CNY (as opposed to the constant badgering form the US and Chuck Schumer demanding a revaluation of the renminbi). Furthermore, as the year winds down to the Chinese Near Year in February, this has been a traditional time when Chinese surpluses decline and go negative, even in good years (see 2010 and 2011). Yet a quick glance at China's two primary trading partners: the US and EU does not reveal anything peculiar: both were either flat or saw just a modest drop in the trade surplus - good news for anyone concerned if the European slowdown would hit the country's largest trading partner. Which is where the decoupling occurred, as the surplus soared in the "rest of the world" or the non-EU/US category. As can be seen below, December is traditionally a month when the surplus contracts and approaches the flatline. Yet this year, oddly enough, the December surplus doubled from $5.8 billion to $11.4 billion. Just who is it, outside of the US and EU, that suddenly saw a pressing need for Chinese imports?And yet all of the above is likely just minutae when one considers something far more important: Chinese Oil imports. As the chart below shows, sooner or later excess capacity within the OPEC system is going to disappear. And then it gets really interesting.

Trifecta Of Economic Horror: Trade Deficit Explodes To $46.3 Billion, PPI Rises Above Expectations As New Jobless Claims Surge

Today's economic data avalance is a trifecta of horror: the August trade balance came at - $46.3 billion (deficit, duh), on expectations of $-44.0 billion, with the previous revised to ($42.6) billion. This is the second highest trade deficit in years. This also means the Q3 GDP will be revised lower again. Oh yes, and Schumer is currently frothing in the mouth as the trade deficit with China was at a record $28 billion, as expected based on the reverse lookup from yesterday's China trade surplus (which dropped). Elsewhere, PPI came in at 0.4%, on expectations of 0.1%: congratulation Ben, you have your inflation, as the bulk of the increase was in food and gas. PPI ex Food and Energy was 0.1%, in line with expectations. Lastly, jobless claims surge from 445K to 462K, with the prior number revised higher for the 24 out of 25 times. And speaking of revisions, the prior week Continuing Claims number was revised from 4,462K to 4,511K: yes stunning, we know. Those on Extended and EUC claims plunge by 340,000 for the week ended September 25, taking away a few more pips from GDP. All in all, this further cements the economic suicide that is QE2.

Daily Highlights: 9.9.2010

  • Afghan president's brother made $800K in Dubai using loan tied to Kabul Bank.
  • Asia stocks up, SKorea unexpectedly leaves key rate at 2.25% as recovery slows.
  • Australian employers' hiring for August exceeds estimates; Currency gains.
  • BOE mulls 'second wave' of bond buying as rebound ebbs.
  • China trade surplus may top $20B, stoking tension over yuan policy.
  • China's stocks decline most in 2 weeks on concern about new property curbs.
  • Euro slides to $1.2693.
  • Norway buys Greek debt as sovereign wealth fund sees no default.