Afternoon all.
More economic data was released by China this morning, reporting that exports fell 17.2% for the January-February period compared to a year earlier and contrasting a gain of 16.5% in December when trade talk resolutions prompted activity to start picking up again.
Imports only shrank 4% from a year earlier but I think this is possibly masked by shipping time logistics reflecting orders that were mostly placed before things started to seriously slowdown. This lag could be corrected in March and lead to further poor looking numbers.
There is also this, showing that it will take a while yet for business activity to get anywhere near normal:
” Though the number of new virus cases in China is falling, and local governments are slowly relaxing emergency measures, analysts say many businesses are taking longer to reopen than expected, and may not return to normal production till April.”
I think there are risks to this situation, because even if China is ready to operate at full capacity in April, the economies in other Countries are potentially starting to be effected and what started as a focus on supply-side issues in China could now morph into demand-side issues from other parts of the world.
It’s going to get very interesting as more countries start to report data reflecting some effects from the Coronavirus situation and while markets tried to cheer the moves by central banks this week, sentiment did not pick up for long and there is chance of a more gloomy outlook developing next week as more and more countries seem to be reporting increased infections today.
Thanks for your time.
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