BlackMask Breaking News

China’s exports unexpectedly accelerated in August, reaching their highest value in nearly two years and providing a rare boost to an economy weighed down by deflationary pressures.

Exports climbed nearly 9% from a year earlier to about $309 billion dollars, the highest since September 2022

and strongly beating estimates. Imports expanded just 0.5%, the customs administration said Tuesday, leaving a trade surplus of $91 billion for the month.Chinese exports have been a bright spot for an economy struggling with a housing slump and deflation. However, the influx of cheap goods to global markets has sparked backlash in the US, South America, and Europe, casting doubt on the sustainability of Beijing’s growth strategy.

“China’s economy continues to show diverging trends with weak domestic demand and strong export competitiveness,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “The question is how long exports can stay strong given the weakening US economy and the rising trade tension.” Investors weren’t too impressed with the data. China’s benchmark CSI 300 fell as much as 0.7% before erasing losses to close 0.1% higher. Chinese 10-year government bond yield inched toward a new record low, while the offshore yuan was little changed after recent declines against the greenback. Economic indicators for August so far shows the economy struggling to regain momentum after a rocky start to the second half of the year. Factory activity contracted for a fourth straight month, while core inflation cooled to the weakest in more than three years. More data is expected on Sept. 14.

What Bloomberg Economics Says…

An increasingly uncertain export outlook and weak domestic demand — behind the import miss — are flagging risk of undershooting this year’s 5% GDP target. This uneven recovery requires policymakers to focus more on spurring demand at home to fight the deflationary spiral — by stepping up stimulus and speeding up delivery of that already rolled out.Eric Zhu, economist

While the continued expansion of exports is positive for the economy, Chinese companies are having to cut prices to secure sales, with the volume of shipments rising faster than the value in recent months. Data out Monday showed that producer prices continued to fall, with prices of manufactured goods dropping 2.7% in August from a year earlier. That rising tide of cheaper Chinese goods is making more and more nations nervous. Some have already imposed tariffs on electric cars, steel and other goods. China’s exports of steel products jumped to 9.5 million tons, the most in three months, despite the pushback from trade partners.

Vehicle exports soared to a record. The breakdown of where those cars went isn’t available yet, but it may show Chinese companies trying to get more EVs into Europe before definitive tariffs kick in.

Overall exports to almost every market grew, with double digit expansions to the EU, India and Brazil. Shipments to the US grew 5.1% to the most since September 2022, while exports to Russia also picked up to the highest this year. Among EU nations, shipments to Germany exceeded $10 billion for the first time since August 2022 and those to France hit the highest in more than two years. “The weakness of imports in China mirrors its weak domestic demand,” said Raymong Yeung, chief economist for greater China at Australia & New Zealand Banking Group. “The strong trade surplus will trigger many concerns of China’s overcapacity, the topic of interest of the US and European policymakers.” NN: China is the binary part of ouroil trade. 70% of Chinese oil consumption  is in the booming manufacturing sector of their economy.

Hamas senior official Izzat al-Rishq warned on Monday that Israeli hostages held by the group “will not see the light of day” if the international community does not pressure Israel’s Prime Minister Benjamin Netanyahu to accept terms of a ceasefire and hostage deal previously agreed upon. Al-Rishq further said that Netanyahu and “his Nazi government” are the ones obstructing the negotiations. He stressed that considering the Israeli prime minister’s new conditions would return the negotiation process to “square one.” Earlier, Netanyahu ensured that he is “fully committed” to a hostage deal. However, he insisted that the Philadelphi Corridor on the border between Gaza and Egypt must be controlled by Israeli forces even after war, which is the main reason why ceasefire negotiations are at a standstill.

Sept. 8 (UPI) — A Ukrainian drone strike ignited fuel tanks at a storage facility near the Russian town of Volokonovka Sunday, a regional governor said on the messaging app Telegram. Photos and videos shared by local Telegram channels at around 6 p.m. local time show a large fire and smoke, reportedly in Belgorod Oblast, the governor, Vyacheslav Gladkov, claimed. Gladkov also alleged that Ukrainian drones attacked three settlements in the oblast, damaging several residential houses and cars. No casualties were reported, according to local media reports. This would appear to be the latest in a series of Ukrainian drone strikes on Russian assets. Earlier this month, officials claim dozens of other drones that were targeting Moscow, Tver, Voronezh, Tula, Kaluga, Bryansk, Belgorod, Lipetsk, and Kursk, were also shot down. A local official claimed 158 drones were immobilized. Three of the drones reportedly targeted the Kashira power plant in the Moscow region. Kyiv’s incursion into Kursk Oblast has entered its fourth week. Ukraine reportedly controls over 500 square miles and 100 settlements, Commander-in-Chief Oleksandr Syrskyi said on Aug. 27. As the war between Russia and Ukraine drags on, Romania and Latvia, both members of NATO, accused Russia of violating their airspace with military drones Sunday. Since Russia launched its attack on Ukraine in 2022, Romania has confirmed drone fragments entering its territory on several occasions, as recently as this summer. The indiscriminate attacks and collateral damage by Russia have ramped up tensions with the West. Romania’s Foreign Ministry protested the alleged violation of the country’s airspace by “criminal Russian aerial vehicles.” The ministry also urged “Russia to stop its reckless escalation,” adding that it had opened consultations with NATO and its allies over the incidents, the ministry posted on X Sunday. Romania scrambled two fighter jets after the drones entered the country’s airspace while heading toward Ukraine, where officials suspect it may have crashed. NATO’s outgoing deputy secretary-general and Romania’s former top diplomat, Mircea Geoana, said the military alliance also condemned Russia’s violation of Romanian airspace. “While we have no information indicating an intentional attack by Russia against Allies, these acts are irresponsible and potentially dangerous,” he wrote on X. NN: Soon NATO will be forced into the fight. 

Crude oil prices began the week with gains as traders took a break after the latest selloff and as a weather system in the Gulf of Mexico could become a hurricane before it makes landfall. “Crude oil recorded its biggest weekly fall in 11 months amid a darkening economic backdrop. Weak jobs data in the U.S. on Friday raised concerns over flagging oil demand in the world’s biggest consumer,” ANZ analysts said in a note cited by Reuters. The latest jobs report from the Labor Department, released on Friday, showed 142,000 new jobs were added in August, which was below expectations. However, unemployment rose less than forecast in the same month, keeping optimism alive about an interest rate cut soon. “OPEC+’s announcement to delay the start of its planned output increase signals that the producers’ group remains focused on balancing the market,” Morgan Stanley analysts said in a note quoted by Bloomberg. “Unless demand weakens more, we estimate Brent likely remains anchored around the mid-$70s.” It is worth noting that the selloff last week did not pause even after OPEC signaled it would not, after all, start returning supply to the market from October and even after the EIA reported yet another sizable draw in crude oil inventories for the last week of August. This week, three reports will move prices, including OPEC’s and the International Energy Agency’s latest monthly market updates. The Energy Information Administration is also scheduled to release its Short-Term Energy Outlook this week. OPEC and the EIA will release their reports on Tuesday. The IEA’s Oil Market Report is due out on Thursday.

The member of Israeli Knesset’s Foreign Affairs and Defense Committee from the ruling Likud party Nissim Vaturi said that it is a “matter of days” before a full-scale war between Israel and Lebanon breaks out. Vaturi told Kan, Israel’s public broadcaster, that in case the conflict between Israel and Hezbollah escalates into war, the militant organization’s stronghold in Beirut’s Dahiyeh neighborhood “will look like Gaza.” Vaturi said Prime Minister Benjamin Netanyahu told Israeli military officials during a briefing on Sunday that Israel “must end this saga” in a possible reference to the ongoing conflict with Hezbollah along the border with Lebanon. “There is no other way,” Vaturi stated, arguing in favor of a preemptive strike against Hezbollah that would culminate in a ground invasion.

Israel on Sunday temporarily closed all its border crossings with Jordan following an attack at the Allenby Bridge, where a gunman from Jordan killed three Israeli security guards before being shot dead. The Israel Airport Authority confirmed the closure of all border points with Jordan in response to the attack after initially just one crossing was shuttered.

Netanyahu vows action after border attack

Israeli Prime Minister Benjamin Netanyahu addressed the recent attack near Jordan’s border, which killed three Israeli security guards. In his statement, Netanyahu emphasized Israel’s commitment to defeating Hamas, recovering all hostages and ensuring Gaza no longer poses a threat to Israel. This statement came amid one of Israel’s largest protests, with thousands of people demonstrating against Netanyahu’s handling of negotiations with Hamas.

Israel attacked 14 Iranian tankers to disrupt oil exports, according to Lieutenant General Hossein Salami, commander of the Islamic Revolutionary Guard Corps (IRGC). Salami stated that the attacks occurred in the Red and Mediterranean Seas, targeting Iran’s efforts to export oil. He also claimed that Israel suffered damage to 12 of its own ships in the process. Iranian-backed forces, including Hezbollah and the Houthis, have declared their support for the Palestinians, with the Houthis specifically targeting  Israeli-linked ships in the Red Sea and beyond.. NN: Sooner or later they will get around to attacking Iranian oil.  just like Ukraine is attacking Russian oil. 

Hedge funds turned the least bullish on crude in records going back more than 13 years on the prospect of swelling supplies and waning demand. Money managers decreased their combined positions on Brent and West Texas Intermediate oil by 99,889 lots to a total net-long position of 139,242 lots, according to ICE Futures Europe and CFTC data for the week ended Sept. 3. That’s the lowest in data stretching back to March 2011.

The souring sentiment comes amid a plunge in prices in recent weeks, driven by worries about demand in the US and China and exacerbated by heavy selling from algorithmic-based funds. Inflaming the negative sentiment was a potential deal to restore Libya’s production as well as the possibility OPEC+ would increase output next month. The group has since paused the plan to revive production, but the reversal has failed to increase prices.

The souring sentiment comes amid a plunge in prices in recent weeks, driven by worries about demand in the US and China and exacerbated by heavy selling from algorithmic-based funds. Inflaming the negative sentiment was a potential deal to restore Libya’s production as well as the possibility OPEC+ would increase output next month. The group has since paused the plan to revive production, but the reversal has failed to increase prices.

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