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.

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