Today marks the beginning of a big data week for China, culminating in the release of September quarter GDP next Monday. On today’s menu we have international trade data for September, with markets expecting another weak outcome this afternoon.
According to a poll of 30 analysts, conducted by Thomson Reuters, both exports and imports are tipped to contract from levels a year earlier.
Exports are expected to decline by 6.3%, steeper than the 5.5% drop in August, while imports are anticipated to slide by 15%, below the 13.8% contraction seen previously.
As a result of the expected monthly fluctuations, trade surplus is tipped to narrow to $46.79 billion from $60.24 billion in August.
According to Li-Gang Liu, Raymond Yeung and Louis Lam, economists at ANZ, there are downside risks to both the export and import figures today.
“Given the sharp decline of September exports in the neighbouring Taiwan (-14.6% y/y) and Korea (-8.3%), we expect that China’s exports may have contracted by 7.2% y/y in September,” they wrote in a research note yesterday.
“Meanwhile, imports may have declined by 15.4% y/y in September, leading to a strong trade surplus of $43.7 billion.”
ANZ suggests that should the poor trade performance seen in July and August be maintained in September, it will would reinforce their view that China’s GDP growth slowed to 6.4% during the quarter from 7.0% in Q2.
Following the trade data released today, China’s national bureau of statistics will deliver CPI and PPI figures tomorrow along with monetary growth and bank lending figures later in the week. On Monday the data calendar reaches its crescendo with the release of industrial production, retail sales and urban fixed asset investment figures for September, along with the most important of them all, Q3 GDP.