Australia: Trade surplus prints $A1.55b for July - TDS

Annette Beacher, Chief Asia-Pacific Macro Strategist at TD Securities, notes that the Australian trade surplus in July came at $A1.55b and sat between TD ($A1.7b) and market ($A1.45b) expectations.

Key Quotes

“On a lack of surprise, the AUD remains unmoved at $US0.72. With rare exception, Australia has registered monthly trade surpluses for nearly two years.”

“While China is always in focus, we point out that LNG exports have tripled in two years and approaching $A40b.”

“Over 2018 to date, Australia's trade surplus with China at $A42b (annualised) now exceeds the 2013 record of $A39b, followed by Japan at $A30b.”

“In the absence of trade with these top two trading partners, Australia's current account deficit this year would be closer to -6.5% rather than a low -2.7% of GDP.”

“Q2 export prices rose by +1.4%/q while volumes rose by +1.1%/q.”

“For Q3, our updated tracking is for prices to edge +0.5%/q higher, while volumes could expand by +2.0%/q, the latter pointing to net exports adding +0.3%pts to Q3 GDP.”