Australia’s terms-of-trade unexpectedly surges

Within today’s dump of balance of payments data that feeds into tomorrow’s March quarter national accounts release was the important news that Australia’s terms-of-trade unexpectedly surged by 2.9% in seasonally adjusted terms.

This result was unexpected because it contradicted both the RBA’s index of commodity prices, which fell by 2.3% over the March quarter:

As well as the ABS’ import/export price index, which also fell by 5.9% over the March quarter:

While the lift in the terms-of-trade is strange, it will help to bolster national disposable income over the March quarter. Not that any of this matters in light of the COVID-19 shutdown.

Leith van Onselen

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