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Strong trade numbers from China helped boost the Aussie, while Trump’s Brexit-related remarks dragged the pound lower in early Asian session trading.

  • Business NZ manufacturing index down from 54.4 to 52.8 in June
  • China’s trade surplus widens from 157B to 262B CNY in June
  • China’s trade surplus (USD-denominated) widens from $24.9B to $41.6B in June
  • Japan’s industrial production remains at -0.2% in May

Major Events/Reports:

China’s trade data

A report printed earlier showed China’s trade surplus widening in June as exports outpaced imports.

The world’s second largest economy clocked in a 261.9B CNY surplus in June, wider than the 157B CNY figure we saw in May. A closer look tells us that exports rose by 3.1% while imports accelerated by 6.0%.

In dollar-denominated terms, China’s trade surplus fell to $41.61B from its $42.79 figure a year ago. Turns out, imports had gotten up by 14.1% while exports “only” shot up by 11.3% from a year earlier.

The most interesting bit is China’s trade surplus with the U.S., which clocked in at $28.97B. That’s the largest monthly surplus OF ALL TIME! Will this convince Trump and his team that they need to impose even more tariffs on China’s goods?

The strong trade numbers could have boosted higher-yielding bets higher, but caution over the impact of the U.S.-China trade war and expectations of a slowdown in Chinese exports took the shine off of the release.

Trump to “kill the deal” with the U.K.?

Just a few hours after PM Theresa May rolled out the carpet for the POTUS, British newspaper The Sun published an exclusive interview with Trump.

One of the juiciest bits of the interview is the part about the Donald advising May on Brexit, sharing that “I actually told Theresa May how to do it, but she didn’t listen to me.

Trump also criticized May’s plans to align the U.K.’s rules for goods and agricultural products with Europe’s, threatening that:

“If they do a deal like that, we would be dealing with the European Union instead of dealing with the U.K., so it will probably kill the deal…”

White House officials have tried to downplay Trump’s remarks, but the reportedly earlier-than-expected publishing time of the interview had already done its damage on the pound and even gained momentum in during the Asian session.

Mixed market sentiment

A weak yen and strong earnings reports of index-heavy companies like Fast Retailing and SoftBank pushed Nikkei higher. Other Asian bourses weren’t so lucky, however.

  • Nikkei is up by 2.10% to 22,654.4
  • A SX 200 is down by 0.40% to 6,271.2
  • Hang Seng is up by 0.58% to 28,645.7
  • Shanghai index is down by 0.12% to 2,834.392

Commodity prices also took some hits as some traders took profits from the previous sessions’ gains.

  • Gold is down by 0.07% to $1,246.30
  • Brent crude oil is down by 0.38% to $74.18
  • U.S. WTI is down by 0.01% to $70.311

Major Market Mover(s):

AUD

The Aussie extended its gains from the previous session and benefited further from China’s strong trade numbers.

AUD/USD is up by 12 pips (+0.16%) to 1.0948; AUD/JPY is up by 19 pips (+0.23%) to 83.55; AUD/CAD is up by 19 pips (+0.20%) to .9763, and EUR/AUD I down by 30 pips (-0.19%) to 1.5721.

GBP

The pound dipped a bit in early Asian session trading after U.K.’s The Sun published its interview with the Donald. And with no headlines to counter the move, the downtrend gained momentum as the session progressed.

GBP/USD is down by 24 pips (-0.18%) to 1.3180; GBP/JPY is down by 16 pips (-0.11%) to 148.43; GBP/AUD is down by 59 pips (-0.33%) to 1.7763; GBP/CAD is down by 27 pips (-0.15%) to 1.7342, and GBP/CHF is down by 32 pips (-0.24%) to 1.3203.

Watch Out For:

  • EC’s Economic and Financial Affairs Council starts meetings today
  • 7:00 am GMT: Germany’s wholesale price index (0.4% expected, 0.8% previous)
  • 8:15 am GMT: Switzerland’s PPI (0.2% expected and previous)