TD Securities' analysts note that China’s June trade data revealed a -1.3% y/y fall in exports (market 1.4%), and a -7.3% y/y fall in imports (market -4.6%).

• “The trade balance was bigger than expected at USD40.98bn (market USD45.0bn). The trade surplus with the US rose to USD29.92bn, with total trade with the US down -13.5% y/y. Both exports and imports reflect a combination of weakening Chinese and global trade and activity.
• Some of the weakness in trade had been flagged by very weak trade across Asia, in particular Korea. The imports fall will be taken as a clear sign that Chinese growth momentum is waning and that need for further stimulus is growing. This will likely be confirmed next Monday, with a slowing in GDP to around 6.2% y/y likely in Q2.”