China's Trade Data Signals Growth Not Hampered by Elevated Commodity Prices

Crude oil retreated after extending gains to the highest level since 2008. Yet, we believe this is a result of profit-taking, rather than any change in fundamentals and the macroeconomic backdrop. The front-month WTI crude contract soared t o as high as $113.46/bbl before pulling back to $112.74/bbl. The equivalent Brent crude contract edged to $127.02/bbl after closing at $126.91/bbl last Friday. The contract has now slipped to $125.90/bbl. China recorded a small trade surplus in March with growth in exports unexpectedly outpacing growth in imports. In 1Q11, China recorded a deficit for the first time in 7 years due to robust imports and elevated commodity prices. The set of readings indicate China will need to tighten further to curb inflation.

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China's Trade Data Signals Growth Not Hampered by Elevated Commodity Prices