China trade data supports gradual recovery – Danske

By FXStreet FXStreet (Córdoba) – According to Allan von Mehren, Chief Analyst at Danske Bank, today’s strong data on Chinese trade, should help ease fears of a hard landing.

Key Quotes:

“Export and import data show encouraging signs of a moderate recovery in China and not a downturn as markets have been fearing and pricing in. As China has been one of the major concerns since the start of the year, this should help ease fears of a hard landing in China and support global risk sentiment. It will also help China stop the capital outflows and halt the depreciation of the CNY in the short term.”

“As interesting and positive is that Chinese imports are picking up strongly. It supports inventory depletion having been a strong driving force behind the slowdown.”

“To sum up, the trade data today supports a picture of a gradual recovery in China as inventory depletion runs its’ course, housing construction picks up during the year and moderate fiscal and monetary stimulus underpin public investment.”

“This should contribute to easing the selling pressure on the CNY. The People’s Bank of China kept the fixing broadly stable for the third consecutive day today around the 6.56 level, still below the market …read more

Source:: FX Street