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Andrew Hanlan, Research Analyst at Westpac, notes that the Australian trade surplus widened to $3.0bn in September, well above expectations (market median and Westpac $1.7bn).

Key Quotes

“History was revised, as often occurs in the final month of the quarter, ahead of the balance of payments.”

“August was upgraded to a surplus of $2.3bn, previously reported as a surplus of $1.6bn.”

“In September, the key surprise was a drop in imports.”

“Imports fell by 1.1%, led lower by a pull-back in capital goods. We had expected a modest rise in imports on higher prices associated with the lower Australian dollar.”

“Exports advanced by 0.8% in the month, broadly as anticipated. Gains were in metal ores and fuels, benefitting from higher global energy prices and higher iron ore prices.”

“Turning the focus to quarterly developments, the trade surplus widened to $6.4bn in Q3, up from $4.2bn in Q2, a $2.2bn improvement (note, these estimates are on a balance of payments basis).”