China Trade Data Is Nail In The Coffin Of Global Economy
Chinese exports and imports even though China's trade balance with the US rose.
Eamonn Sheridan at Forex Live has some interesting comments on China's December Trade Balance.
The export figures are a focus and they are poor indeed. But save some space in the barf bag for the import results, they are terrible - huge miss on these.
Demand in China has been showing evidence of slowing. This is a nail in the coffin.
December 2018 Data - Yuan Terms
- China trade balance comes in at CNY 395bn, expected CNY 345bn, prior was CNY 306bn
- Exports 0.2% y/y, expected 6.6%, prior was 10.2%... BIG MISS
- Imports -3.1% y/y, expected 12.0%, prior was 7.8% … even bigger miss
December 2018 Data - US Dollar Terms
- China trade balance USD 57.06bn, expected $51.6bn, prior was $44.7bn
- Exports -4.4% y/y, expected 2.0%, prior 5.4%
- Imports -7.6% y/y, expected 4.5%, prior was 3.0%
Tariff Man
Let's start with the backward looking data.
— Brad Setser (@Brad_Setser) January 14, 2019
The bilateral deficit with China has increased by about $60b in Trump's first 2ys. That's around 0.5 pp of China's GDP.
And there has been no change in the euro area's trade balance with China (no stimulus there ... ) pic.twitter.com/m4kPL9sVFi
The trailing 12m sum is a lagging indicator. It replicates the y.y data at the end of the year so it covers developments over the 24ms. So the December data for China won't change things much. China's exports to the US rose by about $90b between 16 and 18.
— Brad Setser (@Brad_Setser) January 14, 2019
(5/x) pic.twitter.com/ruiN6Eq9VL
Chinese Investment in the US Slumps to 7-Yr Low
The Financial Times reports Chinese Investment in the US Slumps to 7-Yr Low
Including $13bn in US asset divestitures by Chinese investors, China’s net US investment actually shrank by $8bn in 2018.
Negative Revisions
Updated chart of China trade:
— Trinh (@Trinhnomics) January 14, 2019
Contracted in December (-4.4% YoY for exports & -7.6% YoY for imports in USD). November was revised downward to 8.7% YoY from 10.2%, meaning December was a sharp slowdown.
2018 ended on a whimper & not good news for the rest of Asia, esp Korea pic.twitter.com/xqp6NmGFfT
Worst China Data in 15 Years
This is quite possibly the worst single Chinese data point I've ever seen, in 15 years.
— Adam Button (@FX_Button) January 14, 2019
Expect "Greatest Deal Ever"
Both the US and China desperately need a deal.
So, as I stated 5 days ago, Expect a Deal With China, Just Don't Expect Much From It.
And should there be a deal, expect announcements of the "greatest deal ever" no matter how trivial the deal really is.
Europe Likely in Recession Now: Germany, France, Italy Production Collapsed
In case you missed it, Europe Likely in Recession Now: Germany, France, Italy Production Collapsed
German, French, and Italian industrial production collapsed in November. Italy GDP is negative for 3rd Quarter.
A global recession is on deck.