Weekly Market Recap

Asia Pacific

16/12/2019

Week in review

Week ahead

17/12 – U.S. – Housing Starts, Industrial Production, JOLTS Job Openings
18/12 – JP – Trade Data
18/12 – DE – Ifo Survey
20/12 – U.S. – PCE Inflation

Thought of the week

In November, Chinese exports fell 1.1% year-over-year (y/y), extending a -0.9% drop in October. In particular, exports to the U.S. slumped 23% y/y, contracting for the 12th straight month, as tariffs and a slowdown in global demand continue to drag on Chinese exporters. Export growth within the region, however, stayed positive. Exports to ASEAN countries grew 18% y/y, improving further from the 15.8% growth in October. At a product level, weakness largely came from raw materials such as crude oil and rare earth. On the import side, we saw a slight rebound (0.3% y/y), suggesting a possible bottoming of domestic demand. However, the uptick could be attributed to goodwill imports from the U.S., which increased by 2.7% y/y after contracting since August 2018. While origins of products were not specified, we saw agriculture imports grow 33% y/y, of which soybean imports were up 41%. While the general data was disappointing, continued de-escalation of U.S.-China trade tensions starting with the Phase One deal and expected improvement in global growth, should support overall trade activity.

Chart of the week

Chinese exports extend decline
Year-over-year growth

Source: FactSet, General Administration of Customs People’s Republic of China, J.P. Morgan Asset Management.
Data most recently available as of 13/12/2019.

All returns in local currency unless stated otherwise.
Currencies’ return are based on foreign currencies per U.S. dollar. An appreciation of the foreign currency against the U.S. dollar would be positive and a depreciation of the foreign currency against the U.S. dollar would be negative.

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