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MNI EUROPEAN MARKETS ANALYSIS: 2024 May Be Another Tough Year For Exporters To China

  • China NPC headlines have broadly been in line with market expectations. Accordingly, market impact has been limited. China equities recovered from earlier lows, but HK markets remain under pressure, weighed by the tech sector. A fresh chip ban by the US Commerce Department is weighing on sentiment.
  • In the FX space, AUD and NZD are underperforming amid the negative equity tone. It has been relatively quiet in the fixed income space. Treasury futures have done very little today in the Asian session, volumes remain low and ranges tight making lows of 110-23 and highs of 110-26+ where we trade now.
  • Elsewhere as China reopened, a strong bounce in demand was expected in 2023 that would provide strong demand for those countries with a large export exposure. GDP growth was 5.2% but many exporters didn’t see a recovery in export growth and as a result have become slightly less reliant on the Asian giant. Australia, Indonesia and Singapore are the exceptions. 2024 looks like it may be another tough year for exporters, see below for more details.
  • Later the Fed’s Barr speaks and February services ISM/PMI and final January durable goods orders print. European PMIs are also released.

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  • China NPC headlines have broadly been in line with market expectations. Accordingly, market impact has been limited. China equities recovered from earlier lows, but HK markets remain under pressure, weighed by the tech sector. A fresh chip ban by the US Commerce Department is weighing on sentiment.
  • In the FX space, AUD and NZD are underperforming amid the negative equity tone. It has been relatively quiet in the fixed income space. Treasury futures have done very little today in the Asian session, volumes remain low and ranges tight making lows of 110-23 and highs of 110-26+ where we trade now.
  • Elsewhere as China reopened, a strong bounce in demand was expected in 2023 that would provide strong demand for those countries with a large export exposure. GDP growth was 5.2% but many exporters didn’t see a recovery in export growth and as a result have become slightly less reliant on the Asian giant. Australia, Indonesia and Singapore are the exceptions. 2024 looks like it may be another tough year for exporters, see below for more details.
  • Later the Fed’s Barr speaks and February services ISM/PMI and final January durable goods orders print. European PMIs are also released.

Keep reading...Show less