The month-on-month drop in the trade surplus followed lower exports of coal, coke and briquettes, according to the ABS, with that component of the data dropping by $543 million, or 9 per cent, month-on-month.
Metal ore and mineral exports, which lifted $317 million, or 4 per cent, and a 2 per cent increase in other mineral fuel exports partly compensated for the drop in coal exports, the ABS noted.
Data on trade has taken on increasing importance for markets over the past year, given that the US and China have picked trade as the battleground for a massive power struggle between the top economic powerhouses.
Australia exports metals such as coal and iron ore to China, its biggest trading partner. The mammoth economy has started to show signs that it is struggling as the bilateral trade battle rages.
On Tuesday, investment bank Goldman Sachs chopped back near-term forecasts for metal prices, saying China’s economy has decelerated notably.
Goldman Sachs is holding onto hope that China will ramp up infrastructure investment which in turn will heighten demand for industrial metals.
Last Friday, China’s central bank announced another cut to the amount of cash lenders must hold as reserves in a move to release a net 800 billion yuan ($164 billion) of liquidity and offset a funding squeeze ahead of the Chinese New Year.
The trade data is a key component of Australia’s economic growth picture. Growth slowed to a disappointing 0.3 per cent in the September quarter for an annual increase of 2.8 per cent.
Consumption is the other part of the GDP picture and retail sales data is due out at the end of the week. Economists will be keeping a close eye on that data set as house prices continue to fall.
from Just News Viral http://bit.ly/2CUFRGq
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