Latest Economic Statistics

China's trade surplus unexpectedely soars to $23.8 billion in February. That was really suprising given the fact that the Lunar year holiday occurred in February this year. The total January-February surplus was $39.6 billion-up from $12.6 billion last year. Given that the surplus is typically low at the beginning of the year, this means that the seasonally adjusted surplus is running at least at $25-30 billion per month.

This creates 3 problems for China: 1) It increases the risk of protectionist legislation elsewhere 2) It forces them to accelerate the build up of foreign exchange reserves 3) It contributes to rising inflation. All of which would be remedied if China allowed the yuan to appreciate at a significantly faster.

Meanwhile, Denmark's current account balance is going the opposite way. Despite a surging government budget surplus, the January current account balance fell to -1.1 billion Danish kronor, from a surplus of 0.3 billion last year, bringing down the 12 month surplus to 37.3 billion. Denmark's economic boom, like that of Sweden, is built on a unsustainable credit expansion and property price bubble. However, there are now signs that prices may have peaked, at least in Copenhagen.

The American economy on its hand is showing fresh signs of weakness.Business sales fell a full 0.7% in nominal terms (even more in real terms, of course) in January, while inventory levels reached a two year high. And retail sales rose a mere 0.1% in February, and that's also in nominal terms, meaning real consumer spending likely fell in February