What happened? On Monday, February 21, Russian President Vladimir Putin signed decrees recognizing the sovereignty of the Donetsk and Lugansk People's Republics…
Dismal Chinese imports push American trade deficit to eight-month minimum
In February, the American trade deficit headed south to an eight-month minimum because imports from China went down, suggesting that President Donald Trump's "America First" stance was finally starting to bear fruit.
The shocking narrowing in the trade gap posted by the Commerce Department on Wednesday also suggested a much stronger tempo of the American economic surge in the first quarter than initially expected at the beginning of 2019.
The 20.2% tumble in imports from China turned out to be the key driver behind an almost 3.4% improvement in the American trade deficit to $49.4 billion in February, as data from the Commerce Department revealed. Apparently, the trade deficit has shrunk for two straight months.
Market experts had predicted that the trade shortfall would extend to $53.5 billion in February.
In addition to this, the politically sensitive goods trade deficit with China, which is a focus of the current US presidential administration's protectionist trade stance, headed south by 28.2% hitting $24.8 billion in February because American exports to the world's number two economy headed north by about 18.2%.
However, even with the improvement, the trade deficit is still huge and February's dive in Chinese imports could appear to be temporary. For the last time, the trade data has been volatile against the backdrop of big swings between imports and exports due to the fact that America’s conflicts with trading partners, in particular, China.
The previous year, the American cabinet slapped levies on $250 billion worth of Chinese goods, with the counterpart repelling it with tariffs on $110 billion worth of US products.
In February, the American goods trade deficit headed south by 1.7% hitting $72.0 billion that appears to be the lowest value since last June.
Hong Kong’s HK 50 index rose and the Chinese yuan edged up as traders assess the outcome of the first virtual meeting between US President Joe Biden and Chinese leader Xi Jinping.
A selloff in stocks stopped. S&P 500 has reversed up from the 100-day moving average. It should be the perfect time to buy the index.
The US Bureau of Economic Analysis will publish Core Personal Consumption Expenditures (PCE) on May 27 at 15:30 GMT+3.
The United States will publish the Preliminary GDP on Thursday, May 26, at 15:30 GMT+3.
The Reserve Bank of New Zealand will publish a monetary policy report and make an update on the interest rate on May 25, at 05:00 GMT+3.