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ForexLive Asia FX news wrap: China’s imports slump in December

Forex news for Asia trading Monday 14 January 2019

Weekend:

The big news to open the week came from China’s trade figures for December released today. The trade surplus expanded and beat the median estimate for the month but no one looks at the headline, attention immediately turn to export performance, which fel sharply for a huge miss. But the even more damaging story was told by the import numbers, which shrunk for the month for an even bigger miss.

Exports had been outperforming in past months (due in large part to ‘front loading’ ahead of the US imposition of tariffs) so a slowing in these did not shock anyone (although it was a surprise miss). But the imports data was a shock (I’ll come back to this as maybe it wasn’t), the collapse further cemented the data showing a slow down in domestic demand in the economy. Yes, we have seen data indicative of a slowing and its been a topic of concern, the shock today was the magnitude of the imports fall.      

Analysts will now pore over the detail but currencies didn’t wait around for this. The yen found buyers (USD/JPY lower) and the AUD & kiwi found sellers. AUD/JPY and AUD/NZD took sharp hits lower.

(As an aside, a wee piece of education in bias. I did not see ONE question raised about the veracity of Chinese data. That only happens when Chinese data is positive. Bias, much? ;-). OK, back to the wrap).

From Australia earlier we had a private survey of inflation – a monthly gauge. It showed CPI edging up a little. Official data is on January 30 and is not (at this stage) expected to show core inflation within the RBA target band of 2 – 3%.   

Currency movement apart from those mentioned:

  • EUR/USD is net a little higher on the session, as is USD/CAD and gold.
  • Cable is little changed. There were plenty of the usual weekend Brexit headlines.

One thing TRY traders might like to note is the threatening tweet from US President Trump, to devastate the Turkish economy …

Still to come:

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