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July Trade Data Out Today, Export Growth Expected To Contract Further In Y/Y Terms

CHINA DATA

A reminder that China trade figures for July print today. The market expects -13.2% y/y for exports, the prior was -12.4% (range of forecasts is -4.3% to -16.2%). On the import side the projection is -5.6% y/y, -6.8% was the June outcome (range of forecasts is -1.5% to -10.0%). The trade balance is forecast at $70bn, very close to June's $70.62bn (range of forecasts are $57bn to $92.1bn).

  • On the export side, the manufacturing PMI new export orders print was down a touch in July to 46.3 from 46.4. This is down on levels that prevailed a year ago, although less so compared to June, see the chart below where we plot this series against y/y China export growth.
  • Export growth remaining in negative y/y territory is consistent with weaker CNY NEER levels, although arguably this is already largely reflective in terms of current losses in the NEER.
  • Imports will be eyed from a domestic demand standpoint, with on-going commodity import volumes a focus point.

Fig 1: China Export Growth Y/Y & Manufacturing PMI New Export Orders

Source: MNI - Market News/Bloomberg

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