| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Balance | A$6.7B | A$5.773B | A$6.548B | A$6.027B |
| Imports - M/M | 3.9% | -7.2% | -7.0% | |
| Imports - Y/Y | 3.4% | 10.7% | 10.6% | |
| Exports - M/M | 2.8% | -2.5% | -2.2% | |
| Exports -Y/Y | -7.1% | -5.2% | -6.9% |
Highlights
Australia's goods trade surplus narrowed from a revised A$6.027 billion in April to A$5.773 billion in May, below the consensus forecast of A$6.7 billion. Exports and imports both rebounded from previous declines, with imports doing so more sharply.
In seasonally adjusted terms, the value of exports rose 2.8 percent on the month in May after a decline of 2.2 percent in April. Exports of non-rural goods rose after three consecutive decline, while exports of rural goods also rebounded from a previous decline. Exports fell 7.1 percent on the year in May after a decline of 6.9 percent in April.
Seasonally adjusted imports rose 3.9 percent on the month in May, up sharply from a decline of 7.0 percent in April. Imports of consumption good, capital goods and intermediate and other merchandise goods all rose after previous declines. Total imports rose 3.4 percent on the year in May after increasing 10.6 percent in April.
In seasonally adjusted terms, the value of exports rose 2.8 percent on the month in May after a decline of 2.2 percent in April. Exports of non-rural goods rose after three consecutive decline, while exports of rural goods also rebounded from a previous decline. Exports fell 7.1 percent on the year in May after a decline of 6.9 percent in April.
Seasonally adjusted imports rose 3.9 percent on the month in May, up sharply from a decline of 7.0 percent in April. Imports of consumption good, capital goods and intermediate and other merchandise goods all rose after previous declines. Total imports rose 3.4 percent on the year in May after increasing 10.6 percent in April.
Market Consensus Before Announcement
Consensus for international trade in goods in May is a surplus of A$6.7 billion versus April's A$6.548 billion surplus that benefited, not from strength in exports, but a sharp drop in imports.
Definition
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.
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.
