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Andrew Hanlan, analyst at Westpac, notes that the Australia’s January trade surplus jumped to $4.5bn, second largest surplus on record (in dollar terms) – eclipsed only by a $4.7bn surplus in December 2016.

Key Quotes

“The January outcome was a $0.8bn improvement on December and exceeded expectations (market median $2.75bn and Westpac $3.1bn).”

“Imports did rebound in the month, +3.3%, following a 5.5% fall last month (vs a forecast +4%). Exports were much stronger than anticipated, increasing by 5.0%, up $1.9bn (vs a forecast +2.2%).”

“The trade surplus widened in 2018 and in to 2019 on higher export earnings, boosted by rising commodity prices.”

“The $4.5bn surplus for January compares with a Q4 monthly average of $2.8bn.”

“The surplus for Q1 as a whole is expected to be a material improvement on that in Q4, with export volumes forecast to rise (following a disappointing second half of 2018) and on a likely further increase in the terms of trade.”