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ANZ analysts note that Australia’s  current account  was in surplus in Q2, improving upon the revised AUD1.1bn (previously AUD2.9bn) deficit in Q1.

Key Quotes

“The trade balance increasing to AUD19.9bn from AUD14.8bn was the main driver of this surplus. The fall in the income deficit added to the size of this surplus by decreasing from AUD15.5bn to AUD13.9bn this quarter.”

Export volumes  rose 1.4% q/q led by a 2.4% increase in resources. Coal was the main driver of resource exports, up 3.7% q/q while iron ore exports were only up 0.6% q/q. Meanwhile rural goods fell 4.3% q/q, with weakness seen across most rural categories. Non-monetary gold fell 12% q/q in Q2 following the 39.2% increase in Q1.”

“Import volumes  fell 1.3% q/q reflecting declines across most categories. The biggest decline was from consumption goods, which fell 2.9% q/q. The decline in consumption goods was driven by household electrical items falling 6.1% and car imports declining 10.6% for the quarter.”

“The  terms of trade  rose by 1.5% q/q, reflecting a large rise in export prices (+2.5%) and an increase in import prices (1.0%).”