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Where did China's exports go?

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  • Chinese trade data came in lower than expected. There are various possible causes: base effects; slower global growth; increased accuracy of the data following closer scrutiny by the Chinese authorities.
  • The cause for the data weakness is important. If there is weaker international demand China's data has global implications. If it is simply a case of more accurate readings, then the dynamic of exports (and thus global demand) does not change.
  • Japan revised its first quarter GDP higher, conveniently right before the upper house election campaign. Bank lending also improved in May, although during the first quarter over 40% of the increase in bank lending went either to government or overseas.
  • The Euro area has some industrial production data from component countries. Ahead of the German constitutional court hearings on the OMT program of the ECB (Tuesday and Wednesday) ECB member Asmussen gave an interview to Bild warning of dire consequences if the scheme was threatened.

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