9 May 2016
China: FX reserves surging while trade data disappoints – Deutsche Bank
Research Team at Deutsche Bank, notes that the China’s FX reserves were reported as rising unexpectedly last month by $6.4bn to $3.22tn (vs. $3.20tn expected), the second consecutive month that reserves have increased.
Key Quotes
“The softer US Dollar last month and resulting impact on valuation adjustments looks to have been a big factor in that however.
Also out over the weekend were the April China trade numbers. In US Dollar terms exports were reported as declining -1.8% yoy last month (vs. 0.0% expected) from +11.5% in March. That said, a sharper than expected fall in imports (-10.9% yoy vs. -4.0% expected; -7.6% previously) has resulted in the trade surplus increasing. In CNY terms exports were reported as increasing close to that expected by the market (+4.1% yoy vs. +4.3% expected).”
Key Quotes
“The softer US Dollar last month and resulting impact on valuation adjustments looks to have been a big factor in that however.
Also out over the weekend were the April China trade numbers. In US Dollar terms exports were reported as declining -1.8% yoy last month (vs. 0.0% expected) from +11.5% in March. That said, a sharper than expected fall in imports (-10.9% yoy vs. -4.0% expected; -7.6% previously) has resulted in the trade surplus increasing. In CNY terms exports were reported as increasing close to that expected by the market (+4.1% yoy vs. +4.3% expected).”