Australian Trade Surplus Surges to A$11.4 Billion on Import Slump

Highlights

• Australian trade surplus surges A$3,777 million to A$11,437 million.
• A 7.9% slide in imports delivered the jump in the trade surplus.
• Next up is the US CPI Report.

Australian Trade Terms

On Thursday, Australian trade data warranted investor attention. Improving trade terms would signal an improving macroeconomic environment. A pickup in demand could influence RBA monetary policy goals after the recent retail sales figures.

The Australian trade surplus widened from A$7,660 million to A$11,437 million in November. Economists forecast an Australian trade surplus of A$7.500 million.

According to the ABS,

Exports increased by 1.7% (A$789 million).

• Non-rural goods exports increased by A$887 million, countering an A$112 million fall in the export of non-monetary gold.

Imports tumbled by 7.9% (A$2,988 million).

• Consumption goods imports slid by A$1,635 million. Non-industrial transport equipment imports fell by A$988 million, the most marked contribution.
• Intermediate and other merchandise imports declined by A$617 million.
• Non-monetary gold imports fell by A$483 million.

The pickup in exports sends a positive signal for the Australian economy. The Australian trade-to-GDP ratio is above 50%, with 20% of the workforce in trade-related jobs. However, imports fell across the main categories, which could raise concerns over the outlook for demand.

AUD/USD Reaction to the Australian Trade Data

Before the Aussie trade data, the AUD/USD fell to a low of $0.66946 before rising to a high of $0.67042.

However, in response to the trade data, the Aussie dollar fell to a low of $0.67056 before rising to a high of $0.67095.

On Thursday, the Aussie dollar was up 0.14% to $0.67088.

Next Up

Later today, the US CPI Report and weekly jobless claims will draw investor interest. A pickup in US inflationary pressures could materially influence market bets on a March Fed rate cut.

Economists expect the core inflation rate to soften from 4.0% to 3.8%. However, economists forecast the US annual inflation rate to rise from 3.1% to 3.2% in December.

US jobless claims also need consideration. Labor market conditions remain a focal point for the Fed. Economists forecast initial jobless claims to increase from 202k to 210k in the week ending January 6.