Daily Market Color 08/08/2013

Daily Market Color

08/08/2013

Economic Reports & Headlines

We will start the Daily Market Color off with a buoyant report that was released from China last night. The country’s trade surplus for July came in below consensus, $17.82bn Vs $26.85bn; however, the year over year growth in imports and exports surpassed market expectations. Imports: 10.9% Vs 4.0%, Exports: 5.1% Vs 3.7%.

This morning over in Germany, the country’s trade surplus beat analysts’ estimates for June, E$15.7bn Vs E$14.6bn.

On the domestic front, jobless claims in the US were better than expected, 333k Vs 336k. This is the lowest level since 2007 according to Bloomberg.com.

Trade

Despite the poor trading week overall, we got some encouraging news from China and the US. Jobless claims practically reached a six year low. In addition to that, China is in better shape than the financial media is making it out to be. Although the actual trade surplus fell below consensus, the underlying figures were pleasing to the Bulls. Annual export and import growth surpassed economists’ expectations by a wide margin.

Now some analysts are calling this trade report the end of the forecasted slowdown in China, at least for the remainder of the year. I find myself wondering if the decline in the Australian dollar would come to a halt in light of China’s trade report. I could only make projections based off of the masses at this point. Will market participants vote with their dollars and buy Aussie dollars? Probably not at this point, we need a series of positive reports from China and Australia to make a turnaround in the currency sustainable.