Chinese Exports fall to lowest since 2009 as Euro drops prior to ECB

Yesterday say yet another poor news revelation from China with the contracted exports falling -25.4% in USD term Despite this Chinese markets actually trade higher yesterday with hopes that the PBoC will increase stimulus.

Chinese exports plummeted one quarter in February;- 25.4%  is USD term and -20.6% in Yuan Terms against an expected -11.3%. This is the largest drop in Chinese exports since May 2009. In addition to this, Imports also fell -8%.

Despite the poor economic news coming out of China, they still have clung onto a 6.5% growth rate. Premier Le Keqiang announced a target of 6.5-7% which was conveyed as a very bullish  target with the hope of encouraging more stimulus from Beijing to help achieve that GDP growth.

China has had a very remarkable constant stream of growth, a large portion of this debt recently has come from debt. With this large growth target set in place it is likely that China will keep removing debt to help stimulate growth. This will hopefully pull the Chinese economy from the brink. Despite the poor Chinese economic data, Chinese markets are still looking hopeful.

One Asian currency that seemed not to be fazed by the poor Chinese news is the Japanese Yen, Which showed strength over the past few trading days. With the Bank of Japan policy meeting next week, with hopes of additional stimulus being pumped into the economy, the Yen remains fairly stable.

Overnight, the Euro dropped ahead of the ECB meeting tomorrow (Thursday) where an expected increase in quantitative easing and a cut in deposit rates is expected.

Over the next 10 days we are expecting the policy announcement from 3 of the largest Central banks, therefore we advise all traders to take caution when trading and making their decisions.

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