Trade Balance – China and US


Donald Trump seems to be taking aim at just about any country that runs a trade surplus with the US, branding them as de facto currency manipulators. So pity poor China this week as it is set to release its trade balance data amid a bought of protectionist rhetoric that has even seen the White House claim Germany is manipulating its currency to benefit exporters. Peter Navarro, head of Trump’s National Trade Council, sparked a steep sell-off in the dollar after claiming the euro was “grossly undervalued” at the behest of Berlin.

The euro aside, the protectionist rhetoric with regards China is likely to hot up over this week and this could create some extra volatile trading in the US dollar and Treasury notes.

Ahead of China’s release, US trade figures are due out on Tuesday. The last report showed the deficit was $45.2 billion in November, up $2.9 billion from $42.4 billion in October. Trade wars and the prospect of higher interest rates might increase capital flows to the US, pushing up the greenback and further widening the deficit. No wonder Trump has been so keen to talk down the dollar since his inauguration.




Britain’s exit from the EU will continue to dominate UK assets as MPs debate whether the government can trigger Article 50. The final vote will take place on Wednesday, with MPs expected to back the government on the motion. MPs should be buoyed by the recent upgrade to UK growth, which the Bank of England now expects to hit 2% in 2017.



Over in the US, markets will remain on tenterhooks as Donald Trump pursues his agenda vigorously. Fears about trade wars, protectionism, border taxes and immigrant bans forced markets to take stock last week and the Trump trade seemed to come off the boil. Expect more action from the White House as well as the usual mix of commentary, tweets and off-the-cuff remarks from the new president.



On the corporate front, look forward to a batch of important releases from FTSE firms. Oil giant BP releases on Wednesday, while on Thursday it’s the turn of Rio Tinto, GlaxoSmithKline and Hargreaves Lansdown. Over in the US this week General Motors, Walt Disney, Coca-Cola and Twitter are among the largest firms to report.

Economic Calendar

(All times GMT)

Monday, 6th February

00:30 – Australian retail sales

07:00 – German factory orders

Tentative – US mortgage delinquencies

Tuesday, 7th February

00:01 – UK BRC retail sales monitor

01:45 – China Caixin services PMI

02:00 – New Zealand inflation expectations

03:30 – Reserve Bank of Australia interest rate decisions

08:30 – UK Halifax house price index

13:30 – Canada trade balance data, building permits

13:30 – US trade balance data

15:00 – US JOLTS job openings

Wednesday, 8th February

Tentative – British parliament votes on EU membership

15:30 – US crude oil inventories

20:00 – New Zealand interest rate statement

21:00 – Reserve Bank of New Zealand press conference

23:50 – Japan core machinery orders

Thursday, 9th February

13:30 – US weekly unemployment claims

Friday, 10th February

00:30 – RBA monetary policy statement

Tentative – China trade balance

09:30 – UK manufacturing, industrial &construction production data, goods trade balance report

13:30 – US import prices

15:00 – US preliminary University of Michigan consumer sentiment

Earnings Calendar


Monday, 6th February

Hasbro (HAS) – Q4/2016, EPS estimate 1.286

Tuesday, 7th February

General Motors (GM) – Q4/2016, EPS estimate 1.170

Mondelez International (MDLZ) – Q4/2016, EPS estimate 0.490

Walt Disney (DIS) – Q1/2017, EPS estimate 1.489

BP (BP ) Y/2016, EPS estimate 0.164

Wednesday, 8th February

GlaxoSmithKline (GSK) – Y/2016, EPS estimate 1.012

Hargreaves Lansdown (HL) – S1/2017, EPS estimate 0.213

Redrow (RDW) – S1/2017

Rio Tinto (RIO) – Y/2016, EPS estimate 2.667

Tullow Oil (TLW) – Y/2016, EPS estimate -0.163

Thursday, 9th February

Coca-Cola (KO) – Q4/2016, EPS estimate 0.367

Twitter (TWTR) – Q4/2016, EPS estimate 0.119

Commerzbank (CBK) – Y/2016, EPS estimate 0.453

Thyssenkrupp (TKA) – Q1/2017, EPS estimate 0.190

Source: Bloomberg

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