(08 NOVEMBER 2018)DAILY MARKET BRIEF 2:China equities will bounce bank

China is ideally positioned, but needs improvement on US trade tensions to stage a solid recovery. We continue to position for a strong China equity bounce.

China's inflation has weakened slightly to 2.4% yearly in October from 2.5% in Sept due to weaker food prices. The net effect of tariffs is uncertain. China’s export growth (in USD) rose further from 14.5% yearly in September to 15.6% in October, beating expectations. China’s exports to the US fell to 13.2% annualised in October from 14% in Sept (12.9% in Q3). The 10% additional tariff on USD 200 billion of Chinese goods kicked in only on 24 September.