The narrative is set – today's rally is predicated on "strong" Chinese trade data. So what happens when one chart explodes that narrative as totally fallacious for three simple reasons…
First, the data is clearly cooked… As Bloomberg's Tom Orlik notes, China's March imports from Hong Kong soared an implausible 116% YoY! As it is clearly disguising capital flows…
Trade mis-invoicing as a way to hide capital flows remains a factor. In the past, over-invoicing for exports was used as a way to hide capital inflows.
The latest data show the reverse phenomenon, with over-invoicing of imports as a way of hiding capital outflows.
Does this look "real"?
Second, there is the base effect which EVEN CHINA warned would be a factor:
But beware two factors; the government itself has warned that the base line from March 2015 is low. A reminder that observers shouldn't get complacent about the downward pressures still threatening China's economy.
And then finally, there's the figures themselves, can they be trusted?
But did anyone really need an excuse to buy the record highs in stocks, or send Trannie sup 3% on the day? Of course not!
via http://ift.tt/1SA8GVC Tyler Durden