Something for your Espresso: No help for commodities from China (yet)
Good morning from Europe!
Bad news out of China from the morning with weakness in export numbers, while import numbers improved slightly from already weak levels.
Exports are down 7.5% year over year, which tells a story of idiosyncratic weakness in Chinese goods manufacturing paired with a clear slowdown in the Western economy through May.
Commodities are almost perfectly correlated to Chinese import numbers and still suffer from the lack of momentum despite the Chinese reopening.
Chart 1: China needs to rebound before commodities find firm ground
China’s export/import activity is telling for the global economy and commodities remain a sell. Meanwhile, the TRY is getting annihilated despite Erdogan’s attempts to restore economic credibility.
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