Chinese imports contracted for a 15th consecutive month, with Jan figures down -14.4% from the prior month (which was already at -7.6%). This is a concern for key trading partners such as New Zealand and Australia as it will directly weigh on their export markets, lowering growth in the process. RBA have acknowledged that they expect growth to remain below trend for some time and today's data set will only reaffirm that view.
Chinese imports contract for 15th straight month
Trade balance data from China show further cause for concern for global growth and key trading partners, as both imports and exports contracted at a faster rate.
However despite the gloomy data set, the markets appeared to take the news within its stride with AUD crosses remaining above weekly opening levels. For AUD and NZD crosses to rise then it makes you wonder exactly what the markets were really expecting from today's data set. It is possible that the bearish sentiment awash these past few weaks have reached an extremity, or perhaps there was a growing expecation PBoC were going to intervene to weaken the Yuan on their first day back following Lunar New Year. However a lack of intervention has instilled a positive tone across risker assets, wuth USDCNH now trading at its lowest this year.
JPY crosses also continued to depreciate which could well be explained by profit taking or the natural tendency for markets to retrace following violent, directional price swings.