Next week, China will release its official PM, which, unlike other countries, will always be released on the last day of the month, not on the first day of the next month. This is the first main data publication from the “Liberation Day” when the import tariffs from China were increased by a total of 125 percentage points in the total product range. There are already anecdotal reports of factory closure and sharply reduced working hours. However, the high-frequency data in China is coloring a different image (so far), notes Volkmar Baur, a Commerzbank FX analyst.
CNY holds firmly trade tensions
“For example, steel production is still very strong. During the first 20 days of April, steel production was about 10% higher than in the same period last year. Car sales are currently in April with high one -digit growth. According to the National Institute of Statistics, ship traffic has not decreased significantly.”
“The situation in the housing market is different, where everyday sales data again point to significant slowing and thus until the end of the crisis. However, it must also be said that the housing market has been in crisis for years and that this development is likely to have a lot to do with tariffs.”
“An alternative sentiment indicators point to a slowdown but not to collapse. A similar picture can be expected from the official PM. CNY should be less affected. The US dollar exchange rate has been quite stable for several days. And it will probably stay as long as the political front is no longer positive about the situation. In this case, the USD/CNY may fall slightly. ”
