Market News – China

Weekly Assessment and Outlook Report

China reported a trade balance surplus of 27.7 billion in September.  The country’s exports increased significantly more than expected as a result of exports to other emerging markets in the ASEAN region accounting to 10 percent rise year on year. According to the data released from China at the weekend, this is the fastest pace in three months.

Not surprisingly, the exports to the EU declined into 10.7 percent year on year in September although there were signs of its stabilization. Weak exports have considerably dragged the growth of EU despite having a positive data outlook on September. The EUR/AUD pair has also been extremely volatile, but trading in a bullish trend.

The JPY continued to weaken against majors after the warnings from Japanese officials at the recent International Monetary Fund’s annual meeting in Tokyo last week stating that the competitiveness of the yen was a serious concern for the economy. The yen is currently at a 1-week low of 78.67 against the USD and down from last week’s close of 78.42.

Meanwhile, all eyes are on the euro summit as the key event-risk for this week. Greece is expected to be the main center of attention among policy workers in addition to the Spanish bailout which will very likely trigger a euro rally.