Yuan Strengthens After Rebound In China Exports, Trade Balance Disappoints

It appears that devaluing your currency against by over 10% in a year against your major trading partners does have some affect (albeit delayed). China Exports (in Yuan terms) grew at 5.9% in November (the fastest growth since March) (well ahead of the expected 1% decline). Imports, however, also soared (by 13%) in Yuan terms. However, in USD terms, Imports rose by the most since Sept 2014 (and exports managed a small rise) as China's trade surplus slipped and missed expectations. Offshore Yuan is strengthening modestly on the print.

A 10%-plus devaluation...

And in Yuan terms, China Exports are surging...

 

And in USD terms, Exports also managed a small improvement (as imports soared)...

 

Big jumps in exports to US (+6.9% YoY), Taiwan (+6.5%), and Germany (+5.1% YoY) but exports to Russia soared 26.1% and Brazil by 36.9%.

China import growth was centered on Japan (+17.2%) and Australia (+13.7%), but UK's massive 37.6% surge was the standout.

As Bloomberg notes, Exports stabilizing suggests demand remains intact for now as the world’s largest exporter faces potential headwinds and policy uncertainty as Donald Trump prepares to take office Jan 20.

Exports are getting a lift from "likely improvement in global demand," Song Yu, the Beijing-based chief China economist at Beijing Gao Hua Securities Co., the mainland joint-venture partner of Goldman Sachs Group Inc., wrote in a recent note.

China's trade balance continues to trend lower however...

And the immediate reaction is a modest strengthening in offshore Yuan...