China’s June trade surplus data today is another statistic reflecting the impact of their stimulus plan on their economy. The surplus contracted to $8.25b, much better than expectations of $15.53b and down from $13.4b in May. The reason was solely due to a much smaller than expected decline in imports as domestic consumption rose, higher commodity prices raised the costs of imports and we’ll see if some of the imports were parts that get used in finished products in China that then get exported back out. Almost every single region in the world saw an improvement in their exports to China in June. The May US Trade Deficit is expected to total $30b, up a touch from April but still down more than half from its highs. While the major imbalance is getting corrected, it’s more due to a drop in imports rather than the ideal way of a rise in exports. Unemployment in Canada fell but much less than expected. UoM confidence and Import Prices are out today.

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