Asia stocks cheered by China trade surprise

Asian shares made their first real rally of the year on Wednesday after Chinese data trade data beat expectations, offering a rare shaft of light for the global economy.

Japan’s Nikkei jumped 2.6 percent from a near-one-year trough, while battered Australian stocks gained 1.3 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan sped ahead by 1.6 percent and away from its lowest since late 2011.

Even China’s mercurial markets found some relief with the Shanghai Composite Index up 0.8 percent and the CSI300 index 0.9 percent.

The good cheer spread to E-mini futures contracts for the S&P 500 which climbed 0.8 percent.

The gains came after China reported its exports had risen 2.3 percent in yuan-denominated terms in December, from a year earlier while imports dipped 4.0 percent.

In U.S. dollar terms, China’s December exports exceeded analyst expectations, falling 1.4 pct from a year earlier, while imports fell by 7.6 percent. Analysts polled by Reuters had expected exports to fall 8.0 percent and imports to fall 11.5 percent.

While investors harbor suspicions about the reliability of the data, on the surface they offered hope that world trade flows were at least stabilizing after a dismal 2015.

It also suggested Beijing might prove successful in its increasingly forceful attempts to stabilize the yuan, so dampening fears of a sustained devaluation.

All of which galvanized currency markets where the Australian dollar, often used as a liquid proxy for the yuan, was up half a U.S. cent at $0.7036.

With safe-haven suddenly out of favor, the Japanese yen and the euro eased broadly. The U.S. dollar moved up to 118.22 yen from an early 117.61, while the euro slipped to $1.0815 from $1.0860.

Against a basket of currencies the dollar gained 0.2 percent.

Likewise, low-risk sovereign debt had to surrender a little of their recent gains and yields on 10-year paper nudged up 3 basis points 2.137 percent.

The hint of firmer demand from China provided a reprieve for commodity prices, which have been under the hammer for months.

U.S. crude edged up 44 cents to $30.88 a barrel a day after diving as deep as $29.93 to break the $20 barrier for the first time in 12 years.

Benchmark Brent was quoted 31 cents higher at $31.17 a barrel. U.S. crude had fallen 17 percent in just seven sessions, a gift to consumers across the globe but also a strong force for disinflation.

Source: Reuters