The market sentiment remains risk-off amid rising virus cases around the world and fears over new restrictions and lockdowns.
American trade deficit narrows steeply as exports bounce off
In January, the American trade deficit went down more than anticipated because China ramped up buying of soybeans, resulting in a rebound in exports following three straight monthly dives.
On Monday, the Commerce Department informed that the trade deficit slumped by 14.6% that appears to be the greatest tumble since March last year, hitting $51.1 billion because decreasing domestic demand as well as lower crude prices tamed the import bill.
December’s data was updated a bit downwards to show the trade gap extending to $59.9 billion versus the previously posted $59.8 billion. Experts had hoped that the trade gap would shrink to $57.0 billion in January.
As for the trade deficit, it’s still elevated notwithstanding Trump's "America First" stance that has left the US mired in a bruising trade conflict with China and caused retaliatory levies from other trading partners.
In 2018, the US government slapped levies on $250 billion worth of Chinese goods, with China repelling it with tariffs on $110 billion worth of US goods, in particular, soybeans as well as other commodities.
US leader has postponed levies on $200 billion worth of China’s goods as talks to tackle the eight-month trade conflict resume, with China promising to resume bulk buying of soybeans following a series of cancellations at the height of the trade clash.
American Trade Representative Robert Lighthizer along with Treasury Secretary Steven Mnuchin came to China this week for another round of trade negotiations with their Chinese rival Vice Premier Liu He.
By the way, the politically sensitive trade deficit with China headed south by about 6.4% in January hitting $34.5 billion.
Additionally, exports of cars and parts rallied by $1.2 billion, although shipments of capital goods went down by about $0.8 billion.
China's industrial rebound, progress in US fiscal stimulus and other important news in this article.
The market sentiment is mixed as investors weigh US stimulus package against the rising infections and worse-than-expected US unemployment claims. Jump in for fresh analysis of EUR/USD, USD/JPY, S&P 500 and gold!
US Initial jobless claims will be announced on Thursday at 15:30 MT time.