When is China trade balance and how could it affect AUD/USD?

China trade balance overview

China is set to release April trade data at 0.2:00 GMT today, providing cues on how the trade dispute with the US has affected its exports. 

The trade balance is seen contracting to ¥155.71 billion in April from ¥221.23 billion in March. 

The outbound shipments are forecasted to drop at an annualized rate of 8% in April, following a 21.3% rise in the preceding month. Meanwhile, imports are seen dropping 1%, following a 1.8% fall in March. 

Focus on China’s trade surplus with the US

China’s trade data will hit the wires amid renewed trade tensions. President Trump tweeted on Sunday that the he will increase tariffs on Chinese goods worth $200 billion from the current 10% to 25%, catching both markets and the Chinese officials off guard. 

Trump further threatened to impose 25% tariffs on an additional $325 billion of Chinese goods “shortly.” 

With the re-escalation of trade tensions, investors have begun flocking to safe haven assets. The S&P 500 fell 1.65% on Tuesday and thje anti-risk Japanese Yen gained ground. 

The focus, therefore, is on China’s trade surplus with the US, which stood at $20.5 billion in March. 

Impact on the AUD/USD pair 

An uptick in surplus with the US could exacerbate existing tensions, leading to deeper drop in the risk assets including the Aussie dollar. 

The headline figures could also influence the Aussie pairs. A big beat on Chinese imports may alleviate concerns about the domestic demand in the world’s second biggest economy, helping risky assets regain some poise. 

Also, the AUD and the global equities may pick up a bid if the overall exports figure blows past expectations, indicating an improving global demand conditions. 

About China trade data

The Trade Balance released by the General Administration of Customs of the People’s Republic of China is a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. It is an event that generates some volatility for the CNY. As the Chinese economy has influence on the global economy, this economic indicator would have an impact on the Forex market. In general, a high reading is seen as positive (or bullish) CNY, while a low reading is seen as negative (or bearish) for the CNY.