Still very early for December QTR GDP calculus but a poor start is worth noting, via Westpac:
Imports: rose by 1.7%, +$0.6bn (vs forecast -2.1%).
Exports: advanced by 1.4%, +$0.5bn (vs forecast -2.6%).
The main surprise – on both the import and export side – was the resilience of fuel despite the sharp fall in global energy prices. The upshot, both imports and exports advanced rather than declining as we anticipated.
Import strength: capital goods +6.5%, $433mn; consumption goods +2.3%, $202mn;
Export strength: gold, +$681mn (off a low base); metal ores, +$317mn
Export weakness: coal, -$543mn, as expected, on lower volumes.
For the December quarter to date, the trade figures have been a little disappointing, with the surplus running at a monthly average of $2.0bn. This is down from a $2.2bn average in the September quarter.
On our preliminary figuring, the terms of trade increaased modestly in the December quarter, supported by higher commodity prices. This will tend to underpin an improvement in the trade balance.
By implication, net exports appear to be running as a modest negative (to date) in the quarter, whereas we were expecting a broadly neutral result. We look to the final month of the quarter to turn this it around.
China’s thermal coal ban is not going to deliver that, as previously noted.