* The August trade balance was weaker than expected, coming in at a deficit of $0.8bn (versus median forecast: $-0.4bn).
* Exports rose by a solid 3.1% courtesy of solid rises in gold (33%) and iron ore exports (7%). Imports lifted by 1%.
* The volume of resource commodity exports is lifting which is positive for the growth outlook and means that trade surpluses are likely to return in the coming months and quarters.
The August trade balance came in at a deficit of $0.8bn, with the deficit much wider than market expectations of -$0.4bn (CBA (f): $-0.4bn). But the August trade gap represented a 41% or $0.6bn narrowing from July’s downwardly revised yawning $1.4bn shortfall. QIII has begun with Australia’s trade balance slipping back into deficit after being in surplus for the majority of 2013. We have been anticipating the trade balance to fall back into deficit over this period on the back of the 12% slide in the local currency (since April 2013) which has boosted import values.
Read the full report: Economic Research
Commonwealth Bank