Published at 03:52 (GMT) 10 Nov
Reuters: Annual growth in China's exports and imports slowed in October, data showed on Saturday, reinforcing signs of fragility in the world's second-largest economy that could prompt policymakers to roll out more stimulus measures. Exports rose 11.6 percent in October from a year earlier, slowing from a 15.3 percent jump in September, the General Administration of Customs said. The figure was slightly above market expectations in a Reuters poll of a 10.6 percent rise. A decline in China's leading index on exports in October pointed to weaker export growth in the next two to three months, the administration said. China's external trade environment may slightly improve in 2015 but still faced uncertainties, the Ministry of Commerce said in a report published on Saturday. "It's difficult for external demand to show a significant rebound," the ministry said.
USD/CNY fixed massively lower at 6.1377 for the day, the lowest since June 2010. While many would point towards poorer NFP data for the lower number, we believe that the APEC summit over the weekend had a part to play as well, with the PBoC having a history of fixing USD/CNY lower during international summits. Although 1Y NDFs fell to 6.2525 from 6.2670 after the fixing, it appears that the move is already factored in in the onshore spot market, with prices seen between 6.1139 - 80. Although it would not be too late to adopt shorts in 1Y NDFs, we would advise waiting till the clutch of China data is released, with aggregate financing and retail sales/industrial production due later in the week.
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