"Reign in Spain"

Sub-editors had it easy this morning as they worked on copy about the World Cup Final.....and for, Spain, a country which has had a surfeit of economic precipitation, last night’s win is very welcome indeed. For example, GDP in Spain last year fell 3.6% and will fall again in 2010. The unemployment rate is 20% (and more than double that for 17 to 35 year olds) and the Nation has lost it’s triple-A credit rating. Sovereign debt? Let’s not go there.

Up to 750 million people may have watched the World Cup Final last night, many of them in China despite the absence of it’s national team. That said, I am certain China will be in Brazil in 2014. It certainly ships enough product there (so why not its football team?). In June, exports from China to Brazil surged 125% and, this, after more than doubling in April and May.

In total, Chinese global exports surged 44% last month to a new high of $137.4 billion. Imports moderated (if +34% can be defined as such), which meant the trade surplus rocketed by 140%. These data were all released on Saturday and look pretty good, as does a moderating money supply (weakest since December 2008) and bank lending, which eased for the third month. In turn, this is further good news for inflation. Finally, the Yuan is nudging up (+0.8% since 19 June) although this is probably not enough for the Americans.

But best of all, though, is a stock market which had its best week (+3.7%) of 2010. Has China recovered from being two or three goals down in the first half?

Shanghai Composite:
Today: +0.86% at 2,492.12 at 13.00
Last week: +3.7%
YTD: -24.0%

Hang Seng:
Today: +0.67% at 20,516.07 at 12.35
Last week: +2.4%
YTD: -6.2%

Oil:
$75.93
Gold:
$1200.00
Euro/$
1.2604

Headlines

• China's trade surplus widens in Hune, adding pressure to Yuan
• China FX reserves increase at slowest pace in 11 years
• Money supply and lending slow in June
• Inflation pressures may ease
• Developers rise on loan speculation
• Yuan Forwards strengthen and point to 1.8% appreciation
• US says China should let “undervalued” Yuan rise as promised
• Gradual Yuan appreciation is good for China, says ex-advisor
• China stocks find “bottom” and may rebound
• Torrential rain and floods kill at least 27