Daily Commentary BY THE CURVE TEAM –

UK Election & Australia’s Trade Balance

9th of June, 2017

Most of the overnight news surrounds the likelihood of a hung parliament in the UK following the first exit polls. Domestically, the trade balance figure for April was released, which significantly undershot the surveyed number, including a big miss in one key export line.

UK Sterling fell almost 2% as the BBC exit poll indicates a hung parliament in the UK. The early poll predicts Theresa May will fall 12 seats short of the 326 required for a majority. Economic pundits predict more downside risk to Sterling if May fails to deliver a majority.

The seasonally adjusted trade balance number in Australia was expected to print at $2000m surplus, but the actual figure was $555m. The trade balance, which is effectively the balance on imports and exports on a month by month basis, declined 82% in April from the $3169m surplus in March.

Digging deeper into April, it was coal exports that slipped $2521m, down 45% from the March figure. It will be interesting to see the next GDP number because these statistics point to another weak net export number, negatively contributing to growth and the RBA’s growth targets. The disruption to delivery caused by Cyclone Debbie was a contributing factor.

There is not much to look out for today in terms of data but there will still be close eyes on the UK election. If you are lucky enough to have a day off on Monday, enjoy the long weekend.

James Winder

Client Relationship Manager