China: Exports decline not as bad as it seems - Danske

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 8, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    According to analysts from Danske Bank, today’s report on trade from China, that showed a sharp decline in exports is not as weak as it seems, considering the effects of the Chinese New Year and still shows a moderately rising trend.

    Key Quotes:

    “Chinese exports grabbed the headlines today, showing a decline of 20.6% y/y in February (…) However, the big decline in the y/y rate is largely the result of the monthly jump of 17% m/m in February last year. The data is notoriously volatile and the distortion caused by the Chinese New Year makes matters worse.”

    “We expect the March number to show a rebound in the y/y rate, as exports declined more than 33% m/m in March 2015. This means that if the level of exports is unchanged from February to March this year, the y/y rate will jump sharply to around +10%, which would be the highest number since February 2015.”

    “The bottom line is that one should be cautious when looking at one month’s exports growth measured on a y/y basis. When looking at the trend, the picture is far better than meets the eye.”

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