CHINA: Exports and Imports Beat Estimates for July
- The volatility in trade continued in China's July numbers which topped estimates considerably.
- Exports in USD terms were up +7.2% against estimates of +5.6% with June numbers revised up to +5.9%. In CNY terms exports expanded +8.0%, from +7.2% in June.
- After a contraction in February ahead of the imposition of tariffs, China's exports have maintained positive momentum.
- The rise in imports of +4.0% was unexpected as the market forecast for a contraction. The July import release is the strongest since mid-2024.
- The resulting trade balance of $98.24bn missed estimates and was materially down from the month prior.
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JGBS AUCTION: Poll: 5-Year JGB Auction
*JAPAN 5Y GOVT BOND AUCTION MAY HAVE 100.03 LOWEST PRICE: POLL – BLOOMBERG
FOREX: Leveraged Investors Sell EUR, GBP, Asset Managers Buy Per CFTC
The CFTC FX positioning update (for the week ending July 1) didn't point to strong directional shifts for the USD. The table below updates positioning by currency and investor type, as well as changes from the prior week.
- In the leveraged space, EUR and GBP were sold, but net longs still prevail for this investor segment for these currencies (albeit just for GBP). There was little changed in JPY positioning for leveraged investors, which remains an outright long. The AUD short was largely maintained, while the NZD short was cut back modestly.
- For asset managers, we saw some offset, with EUR and GBP bought. This added to the EUR net long, and cut the GBP net short. The recently established NZD net long was cut, while CAD shorts were added.
Table 1: CFTC Positioning Data By Currency & Investor Type
| Leveraged Contracts | Asset manager Contracts | |||
| Weekly Change | Outright Position | Weekly Change | Outright Position | |
| JPY | -137 | 15798 | 1750 | 94753 |
| EUR | -6502 | 5032 | 6055 | 366743 |
| GBP | -8929 | 36479 | 5324 | -9790 |
| AUD | 60 | -22903 | 945 | -35992 |
| NZD | 3557 | -8424 | -3680 | 8515 |
| CAD | 2009 | -27068 | -10301 | -36386 |
| CHF | -2258 | 1287 | -45 | -36832 |
| MXN | 4421 | -6121 | 1513 | 39499 |
Source: Bloomberg Finance L.P./CFTC/MNI
JGBS: PREVIEW: 5-Year JGB Auction
The Japanese Ministry of Finance (MoF) will today sell Y2.4tn of 5-Year JGBs. The MoF last sold 5-year debt on 19 June 2025, with the auction drawing cover of 4.5783x at an average yield of 0.982%, an average price of 100.08, a high yield of 0.993%, a low price of 100.03, with 73.3986% of bids allotted at the high yield.
- Last month’s 5-year bond auction demonstrated mixed signals on demand. The low price came in below expectations at 100.05, but other indicators were notably strong. The bid-to-cover ratio surged to 4.5783x—the highest since 2023—up from 3.1894x, while the tail narrowed slightly to 0.05 from 0.06, both pointing to improved bidding interest.
- Today’s auction comes after this month’s 10-year bond auction delivered mixed to solid results. The low price beat expectations according to the Bloomberg dealer poll, but the cover ratio decreased slightly to 3.5070x from 3.6627x, and the tail lengthened to 0.03 from 0.01, albeit the shortest since March 2023.
- Results are due at 0435 BST / 1235 JST.
