China's customs bureau reported a record trade surplus of $26.9 billion in June, an 87% y/y increase, driven by exporters rushing to beat cuts in export tax rebates. Economists had expected a surplus of $23.8b on average. The yuan strengthened against the dollar ahead of the data release, for its biggest gain in a month to 7.58. The trade gap with the U.S. accounted for more than half of China's surplus. A Hong Kong-based Goldman Sachs economist commented, "This level of trade surplus is unprecedented for China or any other major economy in the world. China needs to tackle the root cause of its bloating trade surplus: the significantly undervalued currency." June exports climbed 27% to a record $103.3b, while imports rose 14% to $76.4b, the slowest rate in four months. China's first-half surplus totals $112.5b (+85% y/y). In 2006 its full-year surplus was $177.5b.
Commentary: The Economist Says There's No Housing Bubble in China • Investing In China: A Quant Perspective • China Readies Overseas Investment Fund
Stocks/ETFs to watch: iShares Lehman 1-3 YR Treasury Bond (NYSEARCA:SHY), iShares Lehman 7-10 YR Treasury Bond (NYSEARCA:IEF), iShares Lehman 20+ YR Treasury Bond (NYSEARCA:TLT). Currency funds: PowerShares DB G10 Currency Harvest Fund (NYSEARCA:DBV), Euro Currency Trust (NYSEARCA:FXE), CurrencyShares Japanese Yen Trust (NYSEARCA:FXY). China funds: Morgan Stanley China A (NYSE:CAF), iShares Trust FTSE-Xinhua China 25 Index Fund (NYSEARCA:FXI), PowerShares Golden Dragon Halter USX China Portfolio (NASDAQ:PGJ)
Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.