Australia: Trade surplus via import slump in February - TDS

Analysts at TDS note that Australia’s February trade surplus widened to +$A3.6b, well outpacing mkt +$A1.9b and TD’s +$A1.3b and the AUD jumped in response after sagging to $US0.759 earlier.

Key Quotes

“Our views on exports were on track as goods exports rose by +1.5% and services rose by +1.2% as we expected. The surprise in the report was the slump in imports (goods –6.5%/mth).”

“What happened to imports? Consumer goods fell -10%/ mth, led by Household electrical items at –20%/mth and Clothing and Footwear at –16%/mth. Yesterday’s retail sales report was soft as Clothing and Footwear fell –2.5%/ mth. We will be comparing both March reports to gauge if these trends are related.”

“Commodity exports in original terms in February did not have a consistent theme. For example, iron ore lump volume +14%/values –2% while iron ore fines were quantities –8%/values +4%. Overall, Metal Ore and Mineral exports rose by +1%, while Coal rose by +4% (in seasonally adjusted terms, middle chart is annual sum).”

“By country, China surges ahead of Japan as our #1 trading partner. Exports to China were steady at $A7.8b while imports eased from $A5.8b to $A4.2b. Exports to Japan were stable at $A3.5b.”