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Two Ways to Play: Chinese Trade Surges


Strengthen your portfolio in good times and bad.

Chinese Trade Surges

Yuan forwards are at the highest levels in months after growth in China's exports blew past expectations.

In a story by Reuters, exports rose 17.7% from a year earlier, dwarfing consensus forecasts of 4.0% and ending a 13-month streak of year-on-year declines.

Meanwhile, imports jumped 55.9%, which was way above the 31% figure economists were expecting.

The data fueled speculation that China's central banks would let the yuan appreciate in value. In 2008, China effectively pegged the yuan to 6.83 per US dollar. But Premier Wen Jiabao recently said the country won't yield to any pressure forcing China to let the yuan appreciate.

From the Bull Pen: The relationship between the yuan, the dollar, and commodities is clear. Should gold be on its way to new highs, then the goldminers ETF (GDX) is set to outperform. Sell stops can be set in the near term below $48.50.

From the Bear Cave: The oversold bounce in the dollar seems to be done as the bearish dollar fund (UDN) puts in a series of higher lows. Bears can play this stock with a sell stop below $27.50.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei (Closed), India -0.08%, Hang Seng 0.51%, Shanghai (Closed), and Taiwan 0.52%.

Across the pond, we see the FTSE 0.54%, CAC 0.71%, DAX 0.61%

As of 8:15 AM EST, S&P Futures are trading +5.00 to 1146.50. Nasdaq futures are unchanged at 1896.00

A Look at Commodities

Over in commodities, crude oil is +1.03 to 83.78 while gold is +19.20 to 1158.20 this morning. Silver is +0.390 to 18.860 and copper +0.0935to 3.4930.

The dollar Index is -0.5450 to 77.1100.

No events on the radar tonight but Alcoa (AA) kicks off earnings season tonight. Click here for the full trading radar.
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Position in GDX, AA

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