China April exports +8.2% y/y in yuan terms vs -14.1% consensus
China April trade balance $45.34 bn vs $8.68 bn consensuses.
China trade data suggests industrial activity is coming alive in China at a much better rate than expected. And by proxy, this can be viewed favorably when extrapolated across Asian and global economies that are emerging from lockdown implying there is strong economic life post COVID-19
China's exports in April beat expectations, driving the trade surplus wider to $45.34 bn (cons. $8.68bn, last: $19.93 bn). Import data is pending in USD terms, but declined a smaller-than-expected 10.2% y/y in CNY terms (cons. -12.2%). USD//CNH is pushing lower towards 7.11 and closing the gap with today’s USD/CNY fix (7.0931) on the larger-than-expected trade surplus. AUD/USD is rallying in sympathy.
Australian Trade Data
Good news, "down under." The Australia March goods and services trade balance AUD10,602 mn surplus vs. AUD6,800 mn consensus as March exports rebounded +15%, after -5% in February. Which has given a slight lift to the Aussie, but with several critical data darts to dodge over the next 48 hours, the A$ is unlikely to stray too far. But this is positive for China as a good chunk of those commodity exports are earmarked for China and suggest mainland's economic engines are continuing to fire up.
China PMI
China April Caixin services PMI 44.4, after 43.0 in March, didn't precisely herald in a thundering recovery as investors continue to ask themselves where the pent-up demand is? Then again, its hardly a surprise that smaller companies in the service sector are harder hit amid the coronavirus crisis than larger, state-owned ones. So, investors are sidestepping the print in favor of global reopening optimism, which should support China's export sector down the road.
No Fireworks
Despite the ramping up in US-China tensions, it failed to elicit fireworks in USD/CNH and China equities on day 2 of China investors rejoining the fray after the holiday. The markets are remarkably calm as the PBoC pegs the Yuan reference rate on top of market expectations.