China is expected to release its September trade data, one of the country’s most reliable economic indicators, this weekend.Here’s what to expect:
Bank of America’s Ting Lu expects exports to climb 1 per cent year-over-year (YoY) in September. This is down from 2.7 per cent in August, and against the 5.5 per cent, according to a consensus of Bloomberg analysts.
Lu writes that exports are likely to stay in the low single digits or even close to zero for a few months because of the slowdown in Europe and the U.S..
Lu expects imports to climb 1.5 per cent YoY in September, up from -2.7 per cent in August. The consensus of Bloomberg analysts expect imports to rise 2.4 per cent on the year.
Analysts watch import and export data because they can both be independently verified by comparing it with trade numbers reported by other countries. Moreover, SocGen’s Wei Yao has pointed out that it is an important data point for China hard/soft landing watchers since it has a tremendous domestic component and shows the state of domestic demand growth.
Lu expects the trade balance to narrow to $26.2 billion in September, from $26.7 billion in August. Economists polled by Bloomberg expect trade balance to shrink to $20.54 billion.