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China exports (but imports, not so much)

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  • Much of the Euro area is on holiday - taking a well-deserved rest after the drama of last week, which achieved so little in currency market terms. Fortunately the ECB is charging, Don Quixote like, against the non-existent foe of deflation, so it is likely to succeed in preventing deflation.
  • Chinese export figures were robust, suggesting good demand from the rest of the world. Import numbers were weak, but half the weakness was in imports from Brazil and Australia. Bad luck for Brazil and Australia, but underscoring the relative role China plays for everyone else.
  • Fed President Fisher was stating the obvious in the Nikkei overnight, suggesting an end to quantitative policy in October, and that economic circumstances will dictate the timing of interest rates increases.
  • The Bank of Japan's Kuroda was saying that now was not the time for the Bank to exit quantitative policy. As most in the market think that the Bank of Japan will have to do more, not less, this seems a somewhat perverse thing to say.

Listen to the audio version of this briefing.