Coming up today, due at 0130GMT, are the April - June International Trade Price Indexes from the Australian Bureau of Statistics
Q2 Import and Export Price Indexes
- Imports, expected +0.7% q/q, prior +1.2%
- Exports expected -5.5% q/q, prior +9.4%
In a nutshell, import prices higher and export prices lower, which means a lower terms of trade.
What to expect:
TD Securities is using the RBA commodity price index (which fell -10.6%/qtr) as a good guide for today's data. TD looking for a 5% fall in the export price index.
- They add on the Import price index that it is not so easy to forecast, citing conflicting inputs from a "softer currency (TWI - 2.3%/qtr) at the time and a 7% slide in the oil price".
- Net, TD looking for an overall terms of trade correction of -5.6%/qtr
Meanwhile, Westpac:
Import goods prices
- little changed over the past year
- For the June quarter, the price of imported goods is expected to edge higher, increasing by 0.7%, reflecting the impact of the weaker currency
- That would have import prices 1% above the level of a year ago
- The Australian dollar weakened during the June quarter, declining by 2.2% on a TWI basis, reversing the gain in the previous three months. Over the past year, the dollar is 3% higher on a TWI basis
- Global energy prices fell in the June quarter, declining by
- around 5%. Lower fuel prices partially offset the impact on import prices of the weaker dollar.
Export prices
- increased sharply over the past year, rebounding as commodity prices bounced off the lows prevailing early in 2016
- In Q1, the export price index increased by 9.4%qtr, 29.1%yr.
- However, the tide turned in the June quarter. Commodity prices eased back in the period, falling by about 8% in AUD terms, driving a fall in export prices
--
A lower terms of trade should be a negative input for the AUD, but as the title to the post says today's data will be confirmation of a lower terms of trade, its not new news
