Chinese exports rise 48.3% y/y in February

Monday, March 09, 2015

Asian equity benchmark indices started the week on the back foot with most major markets erasing much of the previous session’s gains as investors continued to mull over Friday’s US jobs data. Japanese stock indices ended the session slightly on the back foot despite a weaker yen while mainland Chinese stocks were the only market of note to post steady gains on positive data releases over the weekend. Stronger than expected Chinese trade data released on Sunday saw investors rush into both the Shanghai Composite and CSI 300 which were up 1.89% and 1.7% apiece as the trade surplus reached a record high of $60.6bn in February. Market participants had expected a modest $6bn surplus owing to the Lunar New Year celebrations which had seen demand drop in recent weeks, however, a staggering 48.3% y/y increase in exports propelled the trade surplus to a fresh high in February while a weaker yuan saw imports drop an additional -20.5% y/y against expectations of a -10% decline.

The surprise increase in Friday’s nonfarm payrolls, which rose by 295K in February against expectations of a lower 235K increase, prompted investors to speculate that a US rates rise was on its way. Data released on Friday also showed the US unemployment rate falling to 5.5% in February from 5.7% the previous month, the lowest level since May 2008. With the labour market performing stronger than expected throughout February in an optimistic start to the year market participants are increasingly expecting the Fed to provide a more hawkish outlook in its March meeting with the expectation of a rates rise towards the second half of the year.

The US dollar index rallied to a fresh 12-year high on Friday, gaining 1.26% against a basket of major currencies as it touched levels towards 97.726. Encouraging US data acted as a catalyst for the greenback’s move higher with significant gains being made against the yen in particular, which traded above 121.20 against the dollar on Friday after building on key support around 120.00. Activity early on this morning has seen the dollar index attempt to extend gains for a fourth straight session, trading towards 97.828 early on before pulling back slightly at the start of the European session towards 97.540.

China's trade surplus rallies to record high

CNFRBAL Index China Imports 2015 03 09 07 54 37

Exports drive growth, increasing by 48.3% y/y in February

CNFREXPY Index China Export Tra 2015 03 09 07 55 57

US nonfarm payrolls increase in February

NFP TCH Index US Employees On N 2015 03 09 07 48 18

Labour market data supports DXY to fresh multi-year high

DXY Curncy DOLLAR INDEX SPOT 2015 03 09 07 57 54

Events for today

 

JP

Jan

GDP (08/03/2015)

 

CN

Feb

Trade Balance (08/03/2015)

 

CN

Feb

Imports/Exports (08/03/2015)

0700

DE

Jan

Trade Balance

0930

DE

Mar

Sentix Investor Confidence

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