When is China trade balance and how could it affect AUD/USD?


China’s General Administration of Customs is set to release the March month Trade Balance report sometime during mid-Asia this Tuesday.

Forecasts suggest the headlines Trade Balance figures from $-7.09B to $18B. Further, the YoY Exports likely to bounce from -17.2% to -15% but Imports may drop to -8% from -4.0% previous readouts.

Given the recent slew of positive surprises from China, trade numbers will be closely watched by the traders of the antipodeans as well as commodities.

Ahead of the release, TD Securities said,

We expect March exports and imports to drop by 14% y/y and 1% y/y, respectively. Re-opening of much of the Chinese industry will have helped to limit the decline in imports but actual manufacturing activity likely remained weak. Separately, exports will increasingly be weighed down by shutdowns in the RoW. Nonetheless, Chinese trade with Korea held up reasonably well over the month, indicating that March data will show improvement compared to Jan/Feb; Korean exports to China came in at 21.1% m/m, -5.8% y/y while imports were up 61.2% m/m, 1.6% y/y.

Analysts at Westpac also mentioned,

China’s March trade data will be worth watching. The median forecast is for a surplus of US$20bn, with a material contraction across both imports and exports. There is no fixed time but last month was 11 am local/1 pm Sydney.

How could it affect the AUD/USD?

At the press time, the AUD/USD pair is seen extending gains to 0.6400 while benefitting from the recent US dollar weakness. While the recent pullback in the risk catalysts is also supportive of the price moves, positive surprises from China data could offer additional strength to the Aussie pair.

Technically, the pair needs to provide a clear break above 50-day SMA level of 0.6375 to aim for February month low near 0.6425, until then chances of its pullback to the monthly rising trend line near 0.6235 can’t be ruled out.

Key Notes

AUD/USD remains firm below 0.6400 with eyes on China trade data

AUD/USD Forecast: Gold demand keeps boosting the Aussie

About China's Trade Balance

The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows a trade surplus, while a negative value shows a trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has an influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.

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