Australia's monthly trade surplus widened from A$14.151 billion in February to A$15.269 billion in March. Exports and imports both rebounded strongly on the month from previous declines.

In seasonally adjusted terms, the value of exports rose 3.8 percent on the month in March after a decline of 2.7 percent in February. Exports of non-rural goods (around 60 percent of the total) rose 3.9 percent on the month after falling 3.5 percent previously, largely driven by growth in both the volume and value of iron ore exports. Exports of rural goods (around 15 percent of the total) picked up from 1.6 percent to 10.9 percent, while services exports (around 20 percent) rose 0.9 percent on the month after a previous increase of 0.8 percent. Year-on-year growth in total exports picked up from 13.2 percent in February to 16.5 percent in March.

Seasonally adjusted imports rose 2.5 percent on the month in March after the decline of 10.2 percent recorded in February. Imports of consumption goods and intermediate and other merchandise goods rose on the month after falling previously, while imports of capital goods and services posted smaller month-over-month declines. Imports rose 6.2 percent on the year after falling 2.2 percent previously.

Consensus for goods and services trade in March is a surplus of A$13.3 billion versus February's surplus of A$13.87 billion which was bigger than expected. Yet both exports and especially imports fell in February.

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.