Preview: China trade data due today, a beat could firm up AUD as a demand proxy trade

AI summary

<p dir="ltr">A stronger-than-forecast export print would extend China's reliance on external demand to offset a sluggish domestic economy, a dynamic that has held even as it pushes trade tensions with major partners further into focus. Import strength, if it also beats forecast, would be read more constructively as a signal of firmer domestic demand rather than just re-exported components, and tends to carry more weight for commodity-linked currencies including the Australian dollar. A miss on either side would reinforce concerns that August's still-subdued manufacturing PMI reading is the more accurate signal of underlying momentum than the trade headline.</p><p dir="ltr"></p><p dir="ltr">---</p><p dir="ltr"> The trade data will show whether exports can keep carrying an economy where domestic demand still isn't pulling its weight.</p><p dir="ltr">Summary:</p><ul dir="ltr"><li>Exports forecast to rise 25% year-on-year in August, accelerating from 23.9% in July</li><li>Imports forecast to rise 30% year-on-year, up from 27.5% in July</li><li>Trade surplus expected to widen to around $119.05 billion from $112.5 billion in July</li><li>Exports have become a key pillar propping up growth as domestic consumption and investment stay weak</li><li>China's GDP growth slowed to 4.3% in the second quarter against a 4.5-5% full-year target</li><li><a href="https://investinglive.com/news/china-factory-activity-beats-forecasts-but-stays-in-contraction-in-august/" rel="follow">August's offic