Australia's balance of trade in goods narrowed from A$10.161 billion in August to A$6.786 billion in September. Goods exports fell 1.4 percent on the month after advancing 4.6 percent previously, and fell 14.7 percent on the year after a previous decline of 7.7 percent. Goods imports rose 7.5 percent on the month after falling 0.8 percent previously, and fell 1.7 percent on the year after dropping 5.5 percent previously.

Today's release for the first time contains data only for goods exports and imports, with monthly data on services exports and imports no longer published. Services data will now only be published in a separate report on a quarterly basis.

The Goods Trade Balance measures the difference between imports and exports of tangible goods. 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.