| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Balance | A$10.0B | A$8.039B | A$11.321B | A$10.268B |
| Imports - M/M | 2.5% | -3.9% | -3.3% | |
| Imports - Y/Y | -21.1% | -0.8% | 0.1% | |
| Exports - M/M | -2.0% | -1.7% | -3.1% | |
| Exports -Y/Y | -19.0% | -10.7% | -11.2% |
Highlights
Australia's monthly trade surplus narrowed from a revised A$10.268 billion in June to A$8.039 billion in July. Exports fell for a second consecutive month but imports rebounded.
In seasonally adjusted terms, the value of exports fell 2.0 percent on the month in July after dropping 3.1 percent in June. Rural goods (around 15 percent of the total) rose 7.7 percent on the month after falling 4.2 percent previously, but exports of non-rural goods (around 60 percent of the total) fell 1.4 percent after a previous decline of 4.7 percent and services exports (around 20 percent) fell 1.0 percent after advancing 2.6 percent previously. Exports fell 19.0 percent on the year in June after dropping 11.2 percent in June.
Seasonally adjusted imports rose 2.5 percent on the month in July, rebounding from a decline of 3.3 percent in June. Imports of consumption goods and capital goods rose after previous declines, intermediate and other merchandise goods recorded a smaller decline, and services imports recorded a smaller increase. Total imports fell 21.1 percent on the year in original terms in July after advancing just 0.1 percent in June.
In seasonally adjusted terms, the value of exports fell 2.0 percent on the month in July after dropping 3.1 percent in June. Rural goods (around 15 percent of the total) rose 7.7 percent on the month after falling 4.2 percent previously, but exports of non-rural goods (around 60 percent of the total) fell 1.4 percent after a previous decline of 4.7 percent and services exports (around 20 percent) fell 1.0 percent after advancing 2.6 percent previously. Exports fell 19.0 percent on the year in June after dropping 11.2 percent in June.
Seasonally adjusted imports rose 2.5 percent on the month in July, rebounding from a decline of 3.3 percent in June. Imports of consumption goods and capital goods rose after previous declines, intermediate and other merchandise goods recorded a smaller decline, and services imports recorded a smaller increase. Total imports fell 21.1 percent on the year in original terms in July after advancing just 0.1 percent in June.
Market Consensus Before Announcement
Consensus for goods and services trade in July is a surplus of A$10.0 billion versus June's surplus of A$11.321 billion.
Definition
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.
Description
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.
