China's Exports Miss on Iran War

Market Snapshot

Asset	Level	Change
Shanghai Composite	3,996.67	+0.20%
CSI 300	4,662.83	+0.36%
Hang Seng	25,660.85	-0.90%
TAIEX	35,457.29	+0.11%
USD/CNY	6.82	-0.19%
USD/HKD	7.83	+0.04%
Copper	6.08	+1.77%
Brent Crude	95.14	-4.25%
Gold	4,864.50	+2.57%
Bitcoin	74,266.65	-0.29%
China 2Y Govt Yield	-	-
China 10Y Govt Yield	-	-

Prior Economic Events

Data	Prior	Cons	Actual
New Yuan Loans	900,000m	3,400,000m	2,990,000m
Trade Balance	213,620m	112,000m	51,130m
Exports Year-over-Year	21.80	8.30	2.50
Imports Year-over-Year	19.80	11.10	27.80

Today's Economic Events

Data	Prior	Cons	Time
House Price Index Year-over-Year	-3.20	-	21:30
GDP Growth Year-over-Year	4.50	4.80	22:00
Industrial Production Year-over-Year	6.30	5.60	22:00
Retail Sales Year-over-Year	2.80	2.30	22:00
Fixed Asset Investment (YTD) Year-over-Year	1.80	1.90	22:00
GDP Growth Quarter-over-Quarter	1.20	1.40	22:00
Loan Prime Rate 1Y	3	-	21:15
Loan Prime Rate 5Y	3.50	-	21:15

China's March exports grew just 2.5% YoY, missing consensus of 8.3%, amid Iran war disruptions to global trade, while imports surged 27.8% YoY, exceeding expectations of 11.1%, driven by energy stockpiling.
New yuan loans totaled CNY 2.99 trillion, below the CNY 3.4 trillion forecast, signaling cautious lending amid economic uncertainty; trade balance narrowed to CNY 51.13 billion versus CNY 112 billion expected.
Mainland equities rose modestly with Shanghai Composite up 0.20% and CSI 300 up 0.36%, while Hang Seng fell 0.90% on global risk aversion; TAIEX edged up 0.11% on AI sector resilience.

Yesterday's Recap

China's March trade data disappointed as exports rose only 2.5% YoY against expectations of 8.3%, reflecting fallout from the US-Israeli war in Iran that disrupted global supply chains and elevated energy prices, leading to a sharply narrower trade surplus of CNY 51.13 billion compared to the CNY 112 billion consensus. Imports, however, jumped 27.8% YoY, surpassing the 11.1% forecast, fueled by increased commodity purchases including oil amid fears of Middle East supply halts, with Saudi crude sales to China expected to halve next month per industry reports. New yuan loans came in at CNY 2.99 trillion, missing the CNY 3.4 trillion estimate, indicating banks' restraint in extending credit amid property sector woes and deflationary pressures, where verified China CPI YoY stood at -0.10% as of early 2025.

Mainland markets showed resilience with the Shanghai Composite climbing 0.20% to 3,996.67 and CSI 300 advancing 0.36% to 4,662.83, supported by hopes for PBoC stimulus and a rebound in copper prices up 1.77% to 6.08 as a China growth proxy. Hong Kong's Hang Seng dropped 0.90% to 25,660.85, pressured by tech sector weakness and USD/HKD edging up 0.04% to 7.83 near the peg's upper band. Taiwan's TAIEX rose 0.11% to 35,457.29, buoyed by semiconductor export optimism despite geopolitical tensions, with cross-strait trade flows remaining stable.

The Day Ahead

China's key Q1 data releases on April 15 will dominate attention, including GDP growth YoY expected at 4.8% versus prior 4.5%, alongside quarter-over-quarter at 1.4% from 1.2%, providing insights into the economy's resilience amid the Iran war's global shocks. Industrial production YoY is forecasted at 5.6% down from 6.3%, while retail sales YoY may slip to 2.3% from 2.8%, highlighting consumer demand trends in mainland China. Fixed asset investment YTD YoY is anticipated at 1.9% up slightly from 1.8%, with house price index YoY lacking consensus but following prior -3.2%, potentially signaling ongoing property stabilization efforts.

Later on April 19, the PBoC's loan prime rates for 1Y and 5Y are due, with previous levels at 3% and 3.5% respectively, where markets watch for any cuts to support growth. No major Hong Kong or Taiwan data is scheduled immediately.

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Other Economic Notes

Broader themes in Greater China point to escalating energy security concerns, with China's battery exports surging in Q1 as global demand for clean-tech rises amid the Iran war's oil disruptions, positioning mainland firms to capitalize on electric vehicle and solar supply chains. Property sector dynamics remain a drag, with Hong Kong urged to evolve beyond its intermediary role into a global financial anchor amid geopolitical shifts, while Taiwan's AI-driven semiconductor exports offer a counterbalance to regional slowdowns. Cross-strait investment flows face headwinds, yet Taiwan's stocks reflect AI optimism, underscoring divergent growth drivers within Greater China.

Global Macro News

The US-Israeli war in Iran continues to pressure global growth, with the IMF cutting China's GDP forecast to 4.4% due to energy shocks and trade disruptions, amplifying deflation risks in mainland China where CPI remains negative. Europe's economy has slipped below the ECB's baseline scenario per Lagarde, though not yet adverse, potentially curbing demand for Chinese exports and weighing on Hong Kong's trade intermediary role. Rising oil prices from the Hormuz crisis, with Brent down 4.25% yesterday to 95.14 but overall elevated, spur China's petroyuan ambitions as Xi seeks to challenge USD dominance amid Trump's policies.

Gold's 2.57% gain to 4,864.50 reflects safe-haven flows benefiting Greater China bonds, while copper's strength signals industrial recovery hopes despite weak exports. Japan's verbal yen interventions and Korea's stablecoin push highlight Asian currency dynamics, indirectly supporting CNY stability via regional trade links.

Greater China Central Banks Watch

The PBoC strengthened the USD/CNY reference rate by 64 points, signaling a policy shift toward yuan support amid trade weaknesses and Iran war volatility, with no immediate MLF or LPR changes but markets pricing in potential RRR cuts to boost liquidity after soft loan data. State Council signals emphasize stimulus for property and consumption, aligning with deflationary pressures where CPI YoY is -0.10%. HKMA granted initial stablecoin licenses to HSBC and Standard Chartered, enhancing Hong Kong's digital finance hub status while maintaining the USD/HKD peg, with aggregate balance stable as the rate held near 7.83.

Taiwan's CBC focuses on FX interventions to curb TWD volatility amid semiconductor export growth, with no rate decisions imminent but linkages to AI demand providing policy flexibility. Overall, Greater China's central banks prioritize stability, with PBoC leading easing expectations, HKMA bolstering fintech, and CBC eyeing geopolitical risks to trade.

Greater China Macro Daily(Beta Mode)