Believe it or not! Via UBS:
Mar trade surplus falls more than expected to $3.1bn, after near-record $3.7bn The trade surplus disappointed by falling back a bit more than consensus expected in Mar-17 to (a still large) $3.1bn (UBS: $4.0bn, mkt: $3.3bn), albeit after upward revisions across the prior 4 months, with Feb-17 now the 2nd highest on record at $3.7bn (was initially $3.6bn). In March total export values lifted m/m (+2.4% after flat), and still surged by a booming 29% y/y, albeit mainly driven by higher commodity prices. Resources export values moderated, but remain very strong (+2%, +44% y/y). Meanwhile, rural rebounded after retracing m/m (+7% after -7%, now +26% y/y), while services keep lifting (+1%, +8% y/y). Importantly however, import values rebounded sharply after retracing m/m (+4.6%, after -4.7%, +7.3% y/y), to now be on an accelerating trend – with broad-based y/y growth across consumption, capital & intermediate, but services slowed to ~flat (which could signal better domestic demand).
Looking forward, weather impact still to hit exports ~$2bn in coming months As we previously analysed, the recent weather in QLD & NSW disrupted rail infrastructure for coal exports, suggesting a loss of ~15mt of met coal exports across late-March to May. While this led to a short-term spike of prices, we estimated a net hit to export values of ~$2bn in coming months. This implies export volumes will fall in Q2, seeing a drag from net exports on Q2 real GDP growth, albeit potentially partly offset by higher inventories (which then reverses in Q3).
