China trade data day! Exciting. Do u know why? 1/5 manufactured goods are exported out of China & China is the 2nd largest import market (2.1trn in 2018). Sadly, import has contracted by -5%ytd
Expectations are low: imports to fall by -7.8% from 08.5% in Sept & exports -3.9%👈🏻
Expectations are low: imports to fall by -7.8% from 08.5% in Sept & exports -3.9%👈🏻
Australia investment lending FELL -4% in September vs expectations of 1.5% & from 6.5% in August. Home loan is rising on a MoM basis but investment lending is in the doldrums. RBA statement shows exps of moderate recovery but no wage-growth gains (thinks growth'll rise in 2020)🦘
Check this out - AUD/CNY. While CNY appreciated vs the USD recently on the back of hopism of a deal + Fed rate cuts, AUD actually hasn't appreciated as much & hence the AUD/CNY has actually depreciated, which should help AUD exporters further. On top of this, got low rates 🇦🇺🦘🐨
Meaning, the AUD is very on sale vs the CNY (look at max, average, & min). Not too far from min & a huge discount currently. This is why Australia is the only country other than Vietnam w/ very positive export growth ytd.
But that means purchasing power of AUD of imports lower!
But that means purchasing power of AUD of imports lower!
This is why this is called a teflon economy (as in it doesn't go into a recession much) b/c the FX is pretty absorptive of shock.
As in the RBA is having a very very cheap AUD vs the USD but also on a real effective exchange rate (REER) basis. Soft REER 🦘🇦🇺🤗 & low rates too 👈🏻
As in the RBA is having a very very cheap AUD vs the USD but also on a real effective exchange rate (REER) basis. Soft REER 🦘🇦🇺🤗 & low rates too 👈🏻
China exports fell -0.9%YoY v expectations of -3.9% and imports fell -6.4% vs expectations of 7.8% so both better than expected but still in CONTRACTION. Trade balance is even higher at 42.8bn due to the declining imports so sheltering the domestic economy via the current account
