AUD: Trade balance worse than expectations - TDS

FXStreet (Delhi) – Research Team at TDS, notes that the Australian trade balance for Dec, came in much worse than what the market was expecting, at a deficit of A$3.5b, vs A$2.5b deficit expected.

Key Quotes

“The key driver was the 6.5% drop in goods exports with exports of metal ores and minerals down 15% in Dec. The result for Dec saw the annual trade deficit hit the largest on record (back to 1971). From today’s data we forecast the Dec qtr Current account to track at a –A$21b deficit, or 5.2% of GDP, while the net export contribution should drop to +0.5% of GDP, from +0.8% we were at previously.

Building approvals rose an outsized +9.2%m in Dec, after the near 13% tumble in Nov, the steepest drop in 3 and half years. Not sure how much we can read into this release given the volatility in the series, but concerns that the housing market is slowing may need to get pushed back.”