Chinese indices have risen 2.3% in the past two days, ahead of the slew of data to be released. They include the closely watched trade figures today and Friday’s inflation figures.

China export data to be released today
China will be reporting its trade balance figures for March today. According to Bloomberg, analysts are expecting the export figure to increase 4.8% compared to the same period last year, more than the 3.9% increase in imports.

Last month, Chinese exports unexpectedly fell 18.1% from a year earlier, versus the 7.5% increase forecast by estimates. It was China’s biggest drop in exports since 2009 while imports which rose more than projected left China with a trade deficit of US$23bn, its largest in two years.

The news raised concerns that China will not be able to meet its 7.5% growth target. It also left some wondering if China will reduce its buying of U.S. government debt as a result of the trade deficit. China is the biggest foreign holder of US treasuries, and its large trade surplus has been driving its demand for US debt.

Chinese indices and their performance so far
Chinese indices have been outperforming the region this week, with the SGX-listed China A50 futures rising 2.9% versus the region’s 0.6% fall.

Chinese indices have tended to move on the release of important economic data such as today’s trade balance figures. Last month’s disappointing export figures on 10 March for example, led the Shanghai Composite Index to lose another 2% upon its release.

Source: Macquarie Research - 10 Apr 2014