Iris Pang, economist at ING, notes that China’s exports contracted 0.9% year-on-year in October after contracting 3.2%YoY in the previous month.

“Some export items experienced clear growth on a monthly basis, for example, automatic data processing parts and products (+14%MoM). This could be a result of increased smartphone orders. But exports may contract again in November and December, as exports for Western holidays will have already been shipped. Imports contracted 6.4%YoY in October after an 8.3%YoY contraction in September. The market has reacted positively to the news about a potential phase one deal, especially the possible rollback of tariffs imposed in September on $112 billion of goods. We think USD/CNY will reflect these uncertainties once the market realises that the phase one deal is not a one-way bet.”