USD/CNH is steady beneath key resistance at 7.2000, BBH FX analysts report.
China export increase pushed by ASEAN, EU shipments
“China’s July commerce report reveals exporters racing to front-load forward of the August 12 US-China tariff deal deadline. Export development overshot expectation at 7.2% y/y (consensus: 5.6%) vs. 5.9% in June. The increase in exports was pushed by the ASEAN area (+13.5% YTD from a yr in the past), a key space for reshipment to the US, and the European Union (+7% YTD from a yr in the past).”
“Exports to the US fell -12.6% YTD from a yr in the past. In the meantime, China imports unexpectedly rebounded 4.1% (consensus: -1.0%) vs. 1.1% in June and trace at a fragile restoration in home demand.”
“In our view, three main structural constraints stop any significant effort to extend the position consumption performs in China’s financial system: low family revenue ranges, excessive precautionary financial savings, and excessive ranges of family debt. As such, China will proceed to lean closely on infrastructure to hit its development goal. That is good for commodity costs however unhealthy for China’s long-term financial well being.”
