Daily analysis 08.09.2015

A visible decrease in Chinese foreign trade was not an obstacle in reaching almost a record surplus in goods' turnover. Relatively good data from Germany. The Polish currency remains resistant to the outside commotion.

Most important macro data (CET – Central European Time). Estimations of macro data are based on Bloomberg information, unless marked otherwise.

• No macro data that could have a significant impact on the behaviour of the analysed currencies.

Chinese riddle remains unsolved

During the night we received the data regarding Chinese foreign trade. At first sight it looks weak. Import decreased by 14% (estimated depreciation – 8.5%) and export by 6.1% (the market consensus assumed a decrease on the level of 8.9%).

However, it is worth noticing that a clear decrease in the demand for foreign goods, can be mainly a result of a clear overvalue in the prices of energetic resources and industrial metals, which reached the lowest levels for many years. Due to the fact that this data is published as a total value and not the amount, such changes on raw materials could seriously disturb the reading.

Additionally, one should not forget about the catastrophe in Tianjin, which occurred in the first weeks of August. It could also seriously disturb the condition of import. In the end, it is worth noticing that a part of the Chinese economic activity was reduced due to the preparations for the Chinese Victory Day.

When it comes to export, it was better than the expectations of economists. It shows improvement in comparison to the deeper decrease from the past month. It is also possible that the Chinese export companies were forced to lower the prices of goods sold abroad. This may be a result of a bigger price pressure caused by the depreciation in currencies of the Asian countries.

On the other hand, the balance of foreign trade itself got close to its historical records. A monthly surplus of goods' turnover achieved a value of 60 billion USD. This denies the theory about the deteriorating competitiveness of China.

Of course, the above mentioned examples do not show that the situation is good. Suffice it to say that the private PMI index and its component of new orders in export is 47.7 points and is at a 3-year-old minimum.

Additionally, an element of uncertainty regarding China is intensified with difficulties in access to data. Apart from the press newsletter, the official websites of the Chinese Statistical Office, Ministry of Commerce, and Customs Administration do not contain specific data about August's publication. This also increases the market commotion.

Good data for July from Germany

The German data about the foreign trade makes a much better impression than this from China. Seasonally equalized export increased by 2.4%, and import by 2.2%. Both of these publications were by approximately 1% higher than expectations. Also, our western neighbour achieved a record surplus in goods' turnover. In July it was 25 billion euros.

The demand for the German products outside the European Union is still relatively good. According to Destatis it decreased by 6.4% (without seasonal equalisation). Even though it is slightly less than the average trend in 2014 (7.9%), the publication does not show a bigger slowdown in the global economic activity.

In the end, it is worth noting that the data from Germany presents the readings for July. On the other hand, the Chinese publication presents the numbers for August. The fact that the Chinese data publication was so quick, causes anxiety about accuracy.

Few words about the foreign market

The market is still not sure to what degree the Chinese crisis is a result of factors beyond the condition of China, and by how much is it an effect of a clear economic slowdown in the country. Today's readings do not bring an answer to this question. Considering the macro calendar, the coming hours on the main currency pair should be relatively calm, and the EUR/USD should not leave the area of 1.1150.

No bigger changes on the zloty

Data from the Chinese economy did not have a negative impact on the behaviour of the European floors. Thus, the pressure on an increase in aversion towards risk is limited for the time being. This should translate to stable quotations of the EUR/PLN.

On the other hand, the situation on the franc seems to be improving. The Swiss currency approaches a half-year-old minimum to the euro. This causes the CHF/PLN to now cost 3.88. Foreseen deflation appeared to be deeper than assumed. This may give the SNB more space for action and should sustain the pressure on the franc.

Anticipated levels of PLN according to the EUR/USD rate:

Anticipated GBP/PLN levels according to the GBP/USD rate: