Trading carefully

Daily update

China’s July trade data showed ongoing growth in exports—some of this reflects re-exporting. The gap between what China says it is selling to the US and what the US admits to buying from China has reached extraordinary levels. China’s market share of US non-oil imports is 13.2% (China export data) or 8.4% (US import data). This suggests China’s US customers have become adept at avoiding tariffs, supporting China’s export sector.
German July trade data is also due. Risks of economic nationalism are increasing, with potential implications for future trade policy. The far right’s success in Saxony-Anhalt should not necessarily be taken as a national trend, but it does suggest support for prejudice politics (blaming foreigners is always an easy political option).
Several Bank of England policymakers testify to Parliament, no doubt demonstrating the wide range of their opinions. UK August BRC shop store sales figures were positive overall, supported by food sales (the numbers do not adjust for inflation, and the hot weather will have been a distortion).
The New York Fed’s one-year inflation expectations survey is due—guided by current food and fuel prices. Inflation expectations only matter if people change their behavior as a consequence, and there is little evidence of that happening amongst US consumers.