China: Economic news looking better, although mixed - AmpGFX

Greg Gibbs, analyst at Amplifying Global FX Capital, points out that the Chinese trade and credit growth data on Friday gave risk assets a solid kick, contributing to the break higher in US and global bond yields from their recent range. 

Key Quotes

“Chinese exports rose 14.2%y/y in March, more than 6.5% expected.  Over the first three months of the year, exports rose +0.9%y/y, not great, but improved from the picture a month earlier when exports were down 20.7%y/y in February, down 5.3% 3mth/yoy.”

“However, Chinese imports fell 7.6%y/y in March, below 0.2% expected.  So this should temper the positive vibe from strong exports, suggesting that Chinese businesses are not receiving a big pick up in orders from domestic and export markets to justify higher imports.  It suggests that the rebound in exports might overstate the underlying strength in global demand.”

“New total aggregate credit rose 40% 3mth/yoy in March; this follows a contraction of around 20% y/y in 2018 over 2017.  Note we are talking about the rate of change in new credit, not the stock of credit.”

“The data points to evidence that China has eased monetary conditions through the early months of the year to support economic growth in China; including easing off on its efforts to reign in shadow-banking sectors.  This is part of a broader stimulus effort including tax cuts and infrastructure spending.”