Daily Commentary

MarketMinder’s View: As this article details, “August marks the fifth month in a row that China-to-U.S. shipments have increased due [to] both easier comparisons to last year, along with a more reasonable tariff environment for buyers and suppliers when compared to 2025.” As noted, a lot of that is tied to a low comparison base from a year ago, which skews the figure. Set this figure aside. Beyond that, China’s non-US trade is also booming. “Exports out of China are seeing broad-based strength across Asian markets, with the 10-country Association of Southeast Asian Nations (ASEAN), South Korea and Hong Kong seeing strong growth. ... Across the ASEAN contingency and Hong Kong, all of which serve as transshipment and re-export hubs, a chunk of the growth could reflect goods ultimately destined elsewhere.” With the US importing record amounts from ASEAN markets—and Mexico—it stands to reason Chinese wares are entering America via myriad methods (per FactSet, as Mexico’s imports from Asia also hit record levels). All this underscores how fears of tariffs and global trade’s demise remain greatly exaggerated.

MarketMinder’s View: In the wake of President Donald Trump’s “Liberation Day” last year, an unintended consequence was the strengthening of economic ties among non-US nations—and this article details one of those relationships. Canadian Prime Minister Mark Carney seeks to deepen his country’s alliance with Europe “to cover all areas of the relationship, including trade, security, supply chains and critical raw materials, with the goal of getting as close as legally possible to EU membership without actually joining.” Canada’s escalating spat with America may seem distressing, but it is 1) small potatoes and 2) not the only game in town. As this shows, there are other fish in the sea. Intriguingly, on this front, “The two sides have also discussed working together through the Trans-Pacific Partnership [TPP], a multi-country trade agreement of which Canada is a member.” While the EU isn’t a member of the (CP)TPP, the UK is, and the EU has launched talks to cooperate and coordinate with the CPTPP, both of which could be precedent for the EU joining. Now, nothing here is likely to move rapidly—there will likely be more talks, discussions and summits to come—but trade reality outside America is sunnier than surmised—one reason why non-US stocks, including Canadian, continue to lead year to date (per FactSet).

MarketMinder’s View: As highlighted here, global capital markets are, indeed, global: “Offshore borrowing in China’s currency has hit a record high as a growing number of international corporations and foreign governments seek to take advantage of the country’s record-low interest rates to borrow cheaply. Issuance in China’s ‘dim sum’ and ‘panda’ bond markets has hit Rmb1tn ($149bn) so far this year, according to FT calculations, putting it ahead of last year’s total, itself a record high. Borrowers can raise renminbi-denominated debt outside mainland China through the so-called dim sum bond market or in mainland China in what is known as the panda bond market.” As always, scale and details are important, and this piece provides useful context. For example, those aforementioned panda bonds comprise just 0.25% of China’s bond markets per data firm Wind; demand is concentrated among domestic and some foreign banks rather than large multinationals; and bond issuances remain relatively minor. “The renminbi’s role in global finance remains small. There has been growing use of renminbi-denominated loans offshore and the currency has grown in trade finance, but its usage as a reserve asset remains limited.” Yep—contrary to the many false fears over the past 15 years, the renminbi isn’t close to dethroning the US dollar’s reserve currency status (an overrated designation in any case).