Earlier this morning and during the first trading session of this week, some economic figures were released from China, which had a significant impact on the markets, along with the impact of the French election outcomes. The Chinese figures today can be considered positive. However, the Chinese equities closed lower, losing nearly 1%.
Trade Balance Surplus At The Highest In Three Months
The Trade Balance surplus in China increased again for the second month in a row, posting the highest surplus since January of this year at 38.05B USD up from 23.92B USD. This comes after a deficit of -9.25B in February, which was largely due to the Chinese new year holiday, which was the first deficit since February of 2014.
Exports Picking Up Once Again
The YoY Exports posted the second YoY increase in a row, one we have not seen since 2014, which could be the first bright light at the end of the tunnel. The YoY Exports increased by 8.0% In April compared to 16.4% in March, despite the fact that the estimates were to rise by 10.4%. Yet, this does not change the fact that China’s exports have improved over the past two months, which could be a sign of recovery in the coming months.
Imports Slowed Down Further
As exports increased, imports have slowed down notably. The YoY Imports posted its 2nd slowing down in a row. Something we haven’t seen since 2011. The YoY imports increased by 11.9% in April compared to 20.3 in March, despite the fact that the estimates were to rise by more than 18.0%. This is also the lowest increase in imports since December of last year.
CNH At The Lowest Level Since Mid-April
Following the economic releases today, CNH declined further against the US Dollar, trading around 6.90 once again, after consolidating around 6.88 for more than two weeks. Looking at the technical charts, it looks like USD/CNH is preparing for another breakout over the coming week.
The breakout resistance stands around 6.92, which should be watched very carefully, as a break above that resistance is likely to clear the way to retest last year’s high’s around 6.96, with a possibility to post another historical high around 7.0.
