The Australian Bureau of Statistics will announce the Domestic Trade Balance for August today at 11:30. The consensus forecast is for a deficit of A$ 2.65 billion. The Bureau reported a trade gap of A$ 3.19 billion in June of this year, an increase of 32% from the A$ 2.42 billion deficit reported in May.
The domestic trade balance has not printed a surplus since May of 2014 with a record high deficit of A$ 4.43 billion reported in April of 2015.
The RBA held overnight interest rates unchanged at 1.50% on Tuesday but expressed concern that a rising AUD/USD could dampen economic growth and cause the trade balance to widen further. We expect a larger than consensus reading could weaken the AUD/USD, support local ASX stocks, and increase the RBA’s easing bias into the end of the year.
Author: Leon Hinde
Leon has been working in the financial services industry for 18 years in management and advisory roles. Leon has extensive experience in general advice and dealings involving securities and derivative financial products.
PS 146 Securities & Derivatives, ADA 1 & 2 accreditation, Responsible Manager Certificate. Leon is authorised to provide financial product advice and deal with respect to the following financial products:
· Deposit Products
· Interest in managed investment schemes; and
· Government debentures, bonds and stocks