China To U.S. Exports To Remain Strong In December
China’s exports to the U.S., which grew 8.0% in November, 1.2 percentage points higher than the overall, will remain robust in December as buyers rush orders ahead of expected tariffs in 2025, and sellers increase shipments before the Chinese New Year, 21st Century Business Herald has reported. However, the news outlet noted transport media has remained sufficient, with December’s Shanghai to the U.S. west and east coast shipping rates reaching USD3,309 forty-foot equivalent unit (FEU) and USD4,924, down 1.1% and 0.6% from November. Everbright Securities expects the negative impacts from tariffs in 2025 to become apparent only towards year-end.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUD: A$ Little Changed As Markets Wait For US CPI
Aussie and the US dollar are little changed ahead of US October CPI released later today. AUDUSD fell briefly below 0.6520 before rebounding to 0.6536. It is currently around 0.6535.
- AUDJPY is moderately higher at 101.04, off the intraday high of 101.20. AUDNZD is down 0.1% to 1.1017. AUDEUR is slightly lower at 0.6147 and AUDGBP at 0.5124.
- Q3 WPI printed below expectations at 0.8% q/q and 3.5% y/y after 0.8% q/q and 4.1% y/y, lowest since Q4 2022. Wage pressures appear to be easing as inflation moderates and the economy slows.
- Equities are following the US lower with the ASX down 1.1% and Hang Seng -0.9%, while the S&P e-mini is down 0.2%. Oil is slightly higher with WTI up $68.16/bbl. Copper is up 0.6% and iron ore is steady around $100.50/t.
- Later October US CPI prints and is expected to show a pickup in headline to 2.6% y/y while core should stay at 3.3%. There are also October real earnings and budget data, as well as the Q3 French unemployment rate. The Fed’s Kashkari, Williams, Logan, Musalem, Schmid and BoE’s Mann appear.
GLOBAL MACRO: Global Credit Spreads At Multi-Year Lows
- Credit spreads continue to grind tighter with both US IG & HY OAS now trading at multi-year lows. The BBG US Aggregate spread have tightened 10bps in November, with the Index now at its tightest level on record
- Similar moves have occurred in the Asia credit space, with Asia USD IG now trading at +69bps to record lows, while Asia HY is now back at 2018 lows at +422bps
- The moves come as US tsys yields rise 15-40bps over the past month, a lack of corporate issuance has contributed to the tightening.
Chart. US Aggregate & HY Option Adjusted Spreads
JGBS: Cash Bonds Cheaper After Hotter Than Expected PPI, 30Y Supply Due
In Tokyo morning trade, JGB futures are holding overnight losses, -32 compared to settlement levels.
- Japan's October PPI was stronger than expected, up 0.2%m/m, versus a flat forecast. The prior month was also revised higher to a 0.3% gain (initially reported as flat). In y/y terms, we rose 3.4%, against a 2.9% forecast and 3.1% prior (initially reported as a 2.8% gain).
- Looking at the detail, agriculture +26%y/y, non-ferrous metals +14.6%y/y, along with oil and coal +4.5% and textiles +4.6%y/y were the strongest contributors to the PPI y/y rise. Only three sub-categories saw negative y/y prints.
- Cash US tsys are little changed in today’s Asia-Pac session after yesterday’s heavy session. Key October US CPI inflation data will be released later today. From our October CPI preview, sequential core CPI is seen coming in basically the same as prior (roughly 0.30%), with headline edging up (0.20% vs 0.18% September).
- Cash JGBs are ~2bps cheaper across benchmarks beyond the 1-year (+3.6bps). The benchmark 30-year yield is 1.6bps higher at 2.287% ahead of today’s supply.
- Swap rates are flat to 2bps higher, with a steepening bias. Swap spreads are tighter.
