EM ASIA CREDIT: MNI EM Credit Market Update - Asia

China June trade figures were slightly better than forecast. Exports rose 5.8%y/y, against a 5.0% forecast (4.8% was the May outcome). Imports rose 1.1%y/y, versus 0.3% forecast and -3.4% for May. The trade surplus pushed higher to $114.8bn, slightly above forecasts (near $112bn), while the May print was $103.22bn.

• In terms of commodity import volumes, we had coal down slightly to 33.04mln tonnes (36.04 was the May outcome). Crude oil rose though as did iron ore (to 105.95mln tonnes). Copper and natural gas rose, while soybeans fell slightly.
• Our China policy team noted that H1 imports were impacted by lower commodity prices: "Bulk commodities accounted for about 30% of China's total import value, Wang said, noting the average price of crude oil, iron ore and soybeans dropped more than 10% y/y in H1, dragging down the overall growth rate by 2.7 percentage points."
• Rare earth export volumes rose 32% in m/m terms and were +11.9%y/y. This was a sticking point from the US side around recent trade negotiations. China promised to accelerate export licenses in this space.
• Still, overall exports to the US were still down 16.1%y/y (per BBG). The trade surplus with the US rose to $26.57bn, the first rise since March of this year.  
• The trade surplus with the EU eased to $25.94bn from $26.62bn. the surplus with Hong Kong rose to $26.15bn from $22.97bn.
• China also saw lower trade deficits with both Taiwan and Australia. 

Fig 1: China Export & Import Trends Y/Y

Source: Bloomberg Finance L.P./MNI 

Headlines have crossed from Axios that US President Trump will announce an 'aggressive' Ukraine weapons plan Monday. See this link for more details (via BBG). This follows remarks from an interview late last week, where Trump said (to NBC) he would be making a major announcement on Monday with regards to Russia.  

• Axios notes (via BBG): "President Trump will announce a new plan to arm Ukraine on Monday that is expected to include offensive weapons, two sources with knowledge of the plans tell Axios."
• It adds: "Sending offensive weapons would be a major shift for Trump, who had until recently been at pains to say he would provide only defensive weapons to avoid escalating the conflict."
• And "The new initiative, which will be rolled out in a meeting between Trump and NATO Secretary General Mark Rutte, will involve European countries paying for U.S.-made weapons that will be sent to Ukraine."
• It was reported earlier that Trump would meet with the Secretary General of NATO at 10am ET.
• Earlier Trump remarked that he is very disappointed with Russian President Putin. He has made this point on numerous occasions in recent weeks, given lack of progress around Ukraine/Russia peace talks. 

• CHINA JUN EXPORTS +5.8% Y/Y VS MEDIAN +5.2% Y/Y: CUSTOMS
• CHINA JUN IMPORTS +1.1% Y/Y VS MEDIAN +0.5% Y/Y: CUSTOMS
• CHINA JUN TRADE SURPLUS +$114.8 BLN VS MEDIAN +$113.2 BLN