Daily setups: USD/CAD and China – US trade balance worsen

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The yuan’s slide to a decade-low is adding a new dimension to China’s balancing act: How to support the economy while avoiding a currency policy that widens its rift with the U.S. on trade.

The yuan steadied on Thursday when the People’s Bank of China set the daily reference rate higher than expected -- even though it was fixed at a level that’s weaker than 7 per dollar for the first time since 2008. That signals that traders are convinced that the yuan won’t be allowed to fall precipitously, even amid pressures from the trade war with the U.S. and slowing growth.

Leaving China aside, we take a look at the US side of the story.

The 10 year has posted a island reversal

Yesterday we noted about the yield reversal and potential dollar rally. Also note our post on EURUSD long term target

The first of the data point is outstanding commercial paper. Its slightly below the highs but still high leverage.

US Trade balance

The trade balance with China is between 350 and 400 bn a year. That is still just a tag above the all time lows. The Tariff have had a minor effect till now. The fact is that no other economy is able to supply the US consumer at a scale and cost that China has been. The Trade balance with Mexiso is rising.

Clearly the chinese imports have stalled on the basis of the tariff However the last quarter shows a rise again. This could be front loading before the new tariff hit on 1 sept.

china trade

China trade with US has shown no signs of a stall. Any fall is compensated with the next quarter. The grouse for US is that the imports from US is not growing. China imports are diversifying.

China PPI

The supply side inflation is sharply falling.

The inflation at the consumer side has not seen any effects from falling prices.

JAPAN: Expenditure picking up

Japan capital expenditure is stable but the GDP data is staying above the 0 mark for now. BoJ has accepted that inflation and growth will not meet their objective.

USDCAD was a long trade on QUANTO at 1.3030 and what a move to 1.33 it has been for the system. Currently we have issued a new trade on USDCAD .

QUANTO Tradecopier

Equity returns are now sitting above +100%. Clients who started in May can withdraw the full capital and let the profits run. A 25k account would be siting at 52k now and they can withdraw the initial capital.

The august returns are at +16%

Average weekly returns are at 6.2%. Every week the system is making over +6%.

If you want to start trading QUANTO sysem on a MT4, please contact us

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