Exports in July jumped 7.2% year-on-year, the fastest pace since December 2019, Chinese customs data showed on Friday. Imports, on the other hand, went back into contraction. Imports of industrial raw materials remained stable, with record imports of copper and iron ore, along with sharp jump in crude oil. The country’s trade balance surplus for July stood at USD 62.33bn, compared with an expected USD 42bn surplus and a surplus of USD 46.42bn in June. However, new orders remain weak, which puts the momentum of the recovery in doubt. Chinese consumption is also subdued amid job losses and concerns about a new coronavirus wave. The trade relations with the US are still a point of pressure, with tensions expected to re-arise ahead of the US presidential election. China’s trade surplus with the US widened to USD 32.46bn in July, from USD 29.41bn in June. Senior US and Chinese officials are set to review the implementation of the Phase 1 trade deal in mid-August.
US president Donald Trump signed an executive order banning US residents from doing business with TikTok or its Chinese owner ByteDance. He sais the US must take aggressive action in the interest of national security. The video sharing app has come under pressure from US lawmakers and the administration over national security concerns. The order takes effect in 45 days. Trump did the same for WeChat, whereas other products of the owner Tencent are not affected. This executive order is expected to once again increase tensions in the sino-american trade war. The US president's order comes after the Indian government recently banned ca. 60 Chinese mobile apps, including TikTok and WeChat.
In the US, applications for unemployment benefits fell more than expected to the lowest since the beginning of the pandemic. The decline is broad and took place across nearly all states, implying that the US labor market is healing. According to the Labor Department, initial jobless claims fell by 249 000 to 1.19 million. Meanwhile, continuing claims decreased by 844 000 to 16.1 million. The drop is welcomed warmly after weeks of stagnation at a high level. However, with claims still exceeding a million on a weekly basis, the labor market is far from being fully recovered. Lawmakers are working toward a new stimulus package, but the dispute about the size is still ongoing. Despite the improvement in claims, the picture could deteriorate in the coming weeks as businesses exhaust funds from the current Paycheck Protection Program.
|-||China||China Imports & Exports Trade||USD 46.4bn|
|08:00||Germany||Industrial Production (year-on-year)||-19.3 %|
|08:00||Germany||Trade Balance||EUR 7.1bn|
|08:45||France||Industrial Production (year-on-year)||-23.4 %|
|14:30||USA||Non-farm Payrolls||4 800|
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Source: LGT Bank (Switzerland) Ltd.
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