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Forex Flash: China reports larger than expected trade surplus - BBH

FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that China reported a larger than expected trade surplus as both exports and imports growth were stronger than expected.

They begin by commenting that the April trade surplus stood at $18.16 bln, after a small deficit was recovered in March (distorted by the Lunar New Year). Additionally, exports rose 14.7% y/y after a 10% increase in March , while the market expected about a 9.2% increase. Imports rose 16.8% from a year ago, instead of the consensus forecast for a 13% y/y rise after a 14.1% y/y increase in March. They comment that to their surprise, the yuan has strengthened to new 19-year highs and has completely recovered from the crackdown announced at the start of the week on the imbalances banks had between the foreign currency deposits and loans. They write, “This triggered a sharp short squeeze on Monday, but between yesterday and today, the yuan has recorded its largest two-day advance in over a year. This would seem to suggest that the capital inflows into China remain strong.”

Forex Flash: Will fiscal union solve eurozone’s economic crisis? - Nomura

Richard Koo, Chief Economist at the Nomura Research Institute has questioned whether fiscal union can solve the Eurozone's economic crisis.
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Forex Flash: Australian credit steepens – NAB

Credit spreads continue to tighten and this week it was the Australian semi-government sector, which has played, some catch up with spread to benchmarks around 5-10bps tighter on the week. We had previously, favored the 3y-5y part of the semi-government curve and had expressed this via a QTC curve steepening trade and a long QTC Feb
18 vs. benchmark trade.
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