US DATA: China Has Still Seen The Greatest Trade Correction Post-Tariffs (2/2)
Sep-04 17:11
- Putting the trade data into clearer context, the latest goods and services trade deficit stands at 2.7% GDP on a three-month rolling basis.
- It’s still being driven by large tariff-related distortions: the 2.5% GDP in Q2 compares followed 5.1% GDP in Q1 and compares with 3.4% GDP in 4Q24 or 3.1% GDP through 2024 as a whole.
- The goods deficit dominates this, most recently at 3.8% GDP, vs a steady services surplus of 1.0% GDP that has seen little sign of pullback in use of US services in response to US tariff policies.
- Looking by country, China is still the country which has seen the largest change in trade flows, with a US-China deficit worth 0.5% GDP vs 1.1% GDP end-2024.
- It has been a relatively one-directional trade narrowing in the US-China trade deficit, as opposed to the EU and Switzerland which have seen swings on the back of pharmaceutical and monetary gold trade surges.
- Most recently, the 0.6% GDP three-month rolling deficit with the EU compares with a peak of 1.3% GDP in Mar and 0.8% GDP in Dec whilst trade with Switzerland is broadly in balance with 0.0% GDP vs deficits of 0.7% GDP in Mar and 0.3% GDP in Dec.
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US TSYS/SUPPLY: Review 3Y Note Auction: Another Small Tail
Aug-05 17:03
- Treasury futures remain weaker, little react after $58B 3Y note auction (91282CNU1) tails yet again: drawing 3.669% high yield vs. 3.662% WI; 2.53x bid-to-cover vs. 2.51x prior.
- Peripheral stats see indirect take-up slips to 53.99% vs. 54.11% prior; direct bidder take-up 28.13% from 29.38% prior; primary dealer take-up rises to 17.88% vs. 16.51% prior.
- The next 3Y auction is tentatively scheduled for September 9.
FED: US TSY 3Y NOTE AUCTION: HIGH YLD 3.669%; ALLOTMENT 72.30%
Aug-05 17:02
- US TSY 3Y NOTE AUCTION: HIGH YLD 3.669%; ALLOTMENT 72.30%
- US TSY 3Y NOTE AUCTION: DEALERS TAKE 17.88% OF COMPETITIVES
- US TSY 3Y NOTE AUCTION: DIRECTS TAKE 28.13% OF COMPETITIVES
- US TSY 3Y NOTE AUCTION: INDIRECTS TAKE 53.99% OF COMPETITIVES
- US TSY 3Y AUCTION: BID/CVR 2.53
EURUSD TECHS: Corrective Cycle
Aug-05 17:00
- RES 4: 1.1851 High Sep 10 2021
- RES 3: 1.1829 High Jul 01 and the bull trigger
- RES 2: 1.1789 High Jul 24
- RES 1: 1.1617 20-day EMA
- PRICE: 1.1578 @ 16:43 BST Aug 5
- SUP 1: 1.1401 Low Jul 30 and a bear trigger
- SUP 2: 1.1373 Low Jun 10
- SUP 3: 1.1313 Low May 30
- SUP 4: 1.1184 38.2% retracement of the Feb 3 - Jul 1 bull cycle
Despite Friday's rally and a late recovery into the Tuesday close, EURUSD maintains a bearish tone. The recent breach of key support at the 50-day EMA, at 1.1548, highlights a stronger reversal and the start of a correction. This opens 1.1373 next, the Jun 10 low. Firm resistance is seen at 1.1617, the 20-day EMA, where a break is required to signal a reversal. This week’s price action highlights a key short-term support and bear trigger at 1.1401, Jul 30 low. A break would resume the downtrend.
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