Yesterday, we had trade data for August from enough of NE Asia for us to be confident about the region's export performance: we expect NE Asia's exports rose 2.3% yoy in August, with a monthly movt 0.2SDs below historic seasonal trends. Today we have import data from Germany and France for July. The Eurozone is the last of the G3 economies to report its monthly trade numbers, but today's results give us enough to let us be confident about what happened to G3 imports in July. And remember, the relationship between G3 import demand and NE Asian export supply is the hinge on which the globalized world has turned during the last 20-30 years.
To cut a numbers-heavy story short, Germany and France's import numbers were good enough for us to be confident that in July G3 imports fell 12% yoy in dollar terms, but that the deflection against trend was positive to the tune of 1.8SDs above trend. That follows from, and builds on, the 2.1SD upward deflection in June, and tells us unambiguously that the recovery is being maintained. Which is what we have also seen in NE Asia's August export numbers.
This does not mean everything is plain sailing: in trade terms the trend is not your friend - the ever-growing thicket of non-tariff barriers continues to see to that. Still, if we're tracking data with the aim of seeing whether we are returning to something like economic normality, the trade news of the last two days is unambiguously cheering.
