Trade time

Daily update

China’s May exports were stronger than expected, with the seemingly insatiable demand of companies wanting to play with the nice shiny new toy of AI. Export data to the US was flattered by comparison to the volatility around US tariff announcements last year. Recent months have also shown strength in exports of the electrification big three—solar panels, batteries, and electric vehicles.
US May trade data is due, and assumes increased political importance as the administration aggressively seeks reasons to tariff US consumers of imported goods (possibly borrowing Democrats’ arguments around forced labor and environmental standards). Imports are at the second highest level ever, only exceeded by the pre-tariff surge last year.
The UK BRC May shop sales data was strong—the numbers do not adjust for inflation, but also do not include fuel sales. The numbers are consistent with the general developed economy story—consumers are maintaining consumption momentum for non-oil sales through judicious adjustments of savings rates.
Iran and Israel both announced a suspension of missile exchanges—markets are inclined to give such statements more credibility than those coming from the US, but even the optimism bias can only go so far given the potential for further problems is never that far away in the region.