Terms of trade hammered

Tuesday, 2 September 2014

From today’s Balance of Payments release, the terms of trade fell 4% in the June quarter:

Nominal growth is likely to be negative in Q2 national accounts. Income will be very interesting given wages were surprisingly firm yesterday but the ToT got whacked. This will hurt the Budget by year end.

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.