Australia's monthly trade surplus widened from A$12.743 billion in October to A$13.201 billion in November. Exports and imports both fell on the month for the second consecutive month.

In seasonally adjusted terms, the value of exports fell 0.4 percent on the month in November after dropping 1.2 percent in October. Exports of non-rural goods (around 60 percent of the total) fell 0.5 percent on the month after falling 1.2 percent previously, partly reflecting declines in the value of coal and iron ore exports. Rural goods (around 15 percent of the total) fell 0.6 percent on the month after increasing 1.6 percent previously, while services exports (around 20 percent) rose sharply, up 4.8 percent after advancing 1.89 percent previously. Year-on-year growth in total exports slowed from 38.7 percent in October to 27.2 percent in November.

Seasonally adjusted imports fell 1.5 percent on the month in November after a decline of 2.0 percent in October. Imports of consumption goods, capital goods and intermediate and other merchandise goods fell on the month, while imports of services rebounded after falling previously. Total imports rose 24.5 percent on the year in original terms in November after advancing 42.5 percent in October.

Consensus for goods and services trade in November is a surplus of A$10.9 billion versus October's as-expected surplus of A$12.2 billion.

The Merchandise Trade Balance measures the difference between imports and exports of both tangible goods and services. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the Australian dollar in the foreign exchange market. Imports indicate demand for foreign goods while exports show the demand for Australian goods in its major export market China and elsewhere. The currency can be sensitive to changes in the trade balance since a trade imbalance creates greater demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. A word of caution -- the data are subject to large monthly revisions. Therefore, it can be misleading to form opinions on the basis of one month's data.