CBA: Too early to say the trade sector trend is on the way to permanent deterioration
Commonwealth Bank of Australia with a report on the Australian trade balance data earlier in the day
Some responses are coming in on the trade balance miss here earlier today.
This one is from CBA:
- The back to back trade deficits posted in October/November follow eleven monthly surpluses on the trot
- These latest trade numbers have put a bit of a dent in the view that the external trade sector has remained in ruddy good health with wall to wall monthly surpluses auguring well for the Federal fiscal position
- Despite the disappointing outcome for goods exports in the October/November period, the future still looks relatively positive, with likely continuing strong demand for Australian iron ore and coal by China which continues to experience solid economic growth
- We expect the trade accounts to move back into surplus territory over the coming quarters
- We expect net exports together with stronger public spending on infrastructure, modest household spending and non-residential construction to drive GDP towards growth of 3% through 2018
They expect the trade balance to return back to positive territory in 2018. Meanwhile, the AUD is still relatively weak on the day. AUD/USD is at 0.7844 - just off session lows earlier of 0.7835.