10 Jul 2013
China trade numbers collapse on fake invoicing crackdown
FXstreet.com (Barcelona) - There has been consternation in the Asia-Pacific trading session, as the realization of a Chinese economy losing steam gets reassured by the latest trade numbers published earlier today.
China trade number speak by themselves
Today's Chinese trade figures for the month of June showed a depressing decrease in both imports and exports. While the surplus in the trade balance was kept in check around USD 27.1B vs USD 27.0B expected, real concerns came on the exports and imports numbers (YoY), at -3.1% and -0.7% for the month of June, respectively. Imports included iron ore down 10% in June, a bad sign for the Australian economy. Both prints were well below a forecast from Reuters.
The troubling outlook for the Chinese economy, amid financial commentators starting to make a case for the 6% handle being a yearly growth target too ambitious, comes after a massive crackdown in fraudulent invoicing last May by authorities in China.
According to Yiping Huang, Economist at Barclays, "China could experience a temporary ‘hard landing’ (quarterly growth dropping to 3%) in the next three years."
China trade shows its real identity
As a reminder on how obvious and delirious 'fake' exports invoicing had resulted, not until a short ago, China was still reporting export figures north of 50% to Hong Kong while Hong Kong argued imports from China had increased not even a 2-digit number.
Recognizing the severe turn in fortunes, China Customs Administration spokesman Zheng Yuesheng crossed the wires short after the Chinese trade figures, saying "the trade data may reflect true picture after crackdown on speculative inflows", while also adding that "outlook for exports in Q3 is grim."
Chinese Premier Li has repeatedly warned over the challenges the economy faces, however, he has also reiterated his hard-line stance to inject fresh stimulus in the economy and to keep policy stable, with easing not an option, for now.
Picture does not bode well for the Aussie
Amid this cloudy outlook for China, the Australian Dollar saw its rate vs the US Dollar drop to a session low of 0.9125, but surprisingly, it has since rebounded all they way to presently exchange hands at 0.9180. The market is pricing a 60% chance of a 25bps cut from the RBA in August today, following the negative Chinese and low consumer confidence.
In view of Spiros Papadopoulos, Economist at NAB, The downbeat readings in both Australian business and consumer confidence in the past two days, "is a worrying sign for the RBA", adding that "a weak labour market report tomorrow (NAB expects a fall of 15K and the unemployment rate to rise to 5.6%) would further increase the prospect of a rate cut in August."
China trade number speak by themselves
Today's Chinese trade figures for the month of June showed a depressing decrease in both imports and exports. While the surplus in the trade balance was kept in check around USD 27.1B vs USD 27.0B expected, real concerns came on the exports and imports numbers (YoY), at -3.1% and -0.7% for the month of June, respectively. Imports included iron ore down 10% in June, a bad sign for the Australian economy. Both prints were well below a forecast from Reuters.
The troubling outlook for the Chinese economy, amid financial commentators starting to make a case for the 6% handle being a yearly growth target too ambitious, comes after a massive crackdown in fraudulent invoicing last May by authorities in China.
According to Yiping Huang, Economist at Barclays, "China could experience a temporary ‘hard landing’ (quarterly growth dropping to 3%) in the next three years."
China trade shows its real identity
As a reminder on how obvious and delirious 'fake' exports invoicing had resulted, not until a short ago, China was still reporting export figures north of 50% to Hong Kong while Hong Kong argued imports from China had increased not even a 2-digit number.
Recognizing the severe turn in fortunes, China Customs Administration spokesman Zheng Yuesheng crossed the wires short after the Chinese trade figures, saying "the trade data may reflect true picture after crackdown on speculative inflows", while also adding that "outlook for exports in Q3 is grim."
Chinese Premier Li has repeatedly warned over the challenges the economy faces, however, he has also reiterated his hard-line stance to inject fresh stimulus in the economy and to keep policy stable, with easing not an option, for now.
Picture does not bode well for the Aussie
Amid this cloudy outlook for China, the Australian Dollar saw its rate vs the US Dollar drop to a session low of 0.9125, but surprisingly, it has since rebounded all they way to presently exchange hands at 0.9180. The market is pricing a 60% chance of a 25bps cut from the RBA in August today, following the negative Chinese and low consumer confidence.
In view of Spiros Papadopoulos, Economist at NAB, The downbeat readings in both Australian business and consumer confidence in the past two days, "is a worrying sign for the RBA", adding that "a weak labour market report tomorrow (NAB expects a fall of 15K and the unemployment rate to rise to 5.6%) would further increase the prospect of a rate cut in August."