China: August trade data likely to show further contraction – ING

FXStreet (Delhi) – Tim Condon, Chief Economist at ING, expects that the Chinese trade data for August is likely to be on a softer side as exports and imports will continue to contract.

Key Quotes

“Countercyclical financial policy and supply-side reforms are effective in offsetting commodity price shock to trade, which is positive for equity market. August trade data are due tomorrow. The consensus forecasts are for single-digit – 6.7% and 8.0% – contractions in exports and imports, consistent with what happened in July.”

“The 2H14 commodity price crash was an adverse shock to global trade growth. The Chinese authorities have offset more of the shock than their North Asian neighbours via countercyclical financial policy and supply-side reform, which other things equal would be positive for the equity market. What remains to be seen is how much of the adverse trade shock persists beyond 2015.”

Tim Condon, Chief Economist at ING, expects that the Chinese trade data for August is likely to be on a softer side as exports and imports will continue to contract.

(Market News Provided by FXstreet)