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Jan-Feb Trade Figures Better Than Forecast, But No Follow Through Support For the Yuan


China trade figures were better than forecast for the Jan-Feb period. The Feb data gets reported this way due to LNY timing, which would obviously impact the headline Feb result. Exports were +7.1% ytd y/y versus 1.9% forecast. Imports rose 6.7% ytd y/y. The trade surplus is $125.16bn ytd, versus a $106.8bn forecast.

  • In terms of the detail, exports processed with import materials were -12.2% ytd y/y. Note this item was -14.6% y/y in Dec. Other parts of exports generally recorded healthy ytd y/y rises.
  • By country exports were stronger to India and the US along with parts of the EU. Asean exports also rose, but softer trends were seen to Japan and South Korea.
  • On the import side, crude oil imports were higher compared to a year ago (88.31mln tonnes versus 84.05 a yr ago). Iron ore imports were 209.45mln tonnes, versus 193.8 a year earlier. Coal imports and natural gas imports were also up on levels versus a year ago.
  • Better export growth and the healthy trade surplus is being offset by capital outflows from a yuan standpoint. Reuters noted yesterday that domestic investors are butting up against outbound investment limits. General confidence around the economic outlook also remains a headwind, while China's low rates compared to other major economies, particularly the US, is likely driving preferences towards foreign currency holdings rather than the yuan. USD/CNH sits little changed post the data, last near 7.2100.
  • Note we get Feb inflation data out on Saturday, which is likely to carry more weight in terms of the monetary policy outlook.

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