Markets Live: ASX Rides Wall St's Wave

This is source I found from another site, main source you can find in last paragraph

A few economist

reactions to the surprise narrowing in the trade surplus, which was largely due to a collapse in - very volatile - gold exports as well as sharply lower coal exports:

Rahul Bajoria, Barclays:

The ongoing recovery in exports remains dependent on buoyant commodity prices. However, the

recent sharp decline in coking coal prices raises some concerns over its sustainability. In January, we saw some reversal in mineral exports, with iron ore, coal, and gold reporting sharp m/m declines. Non-rural goods exports, which cover the bulk commodities, fell 2% m/m, with shipments to China declining at the margin. Services exports were largely stable, and LNG shipments improved slightly.

Tom Kennedy, JPMorgan:


weakness in exports is particularly surprising

given the dual tailwinds of a soaring terms of trade and increased commodity output capacity. Iron ore values fell 2%m/m in January, while the impressive run in coal appears to be running out of steam as shipment values dropped close to 7%m/m. While these more fundamental drivers of the trade data were undoubtedly less favourable than we had hoped, we also note a

sharp drop in the very volatile non-monetary gold category to the tune of 40%m/m (or $670 million) which helps to explain at least some of the weakness in exports.

Josh Williamson, Citi:

While we were correct in expecting an export correction based on lower iron ore and coal quantities, i

mport growth was stronger than we expected. We would highlight the recovery in consumption imports particularly household electrical items, transport equipment and food and beverages. But

the monthly result is still respectable despite missing the market consensus. The

quiet achiever in the data was gas exports. These have risen for eight consecutive months and should rise further in the medium term. This will support GDP growth and according to the RBA will add around ½ppt to yearly growth each year in 2017 and 2018.

Kristina Clifton, CBA: 

The fall in exports in January was due to a 2% decline in the exports of rural goods and a

39% fall in non‑monetary gold (this is a small but volatile component of trade). Both coal and iron ore exports were reported to have fallen in the month. We expect to see bulk commodities prices ease further over the course of the year. Nonetheless we are

likely to continue to see decent trade surpluses for the time being with commodity prices still around 45% above their most recent lows in late 2015.

George Tharenou, UBS:

The resurgence of commodity prices has been the main driver of booming export values (albeit total export volumes also jumped 9% y/y in Q4). But January's seemingly strange drop in resource exports, despite higher commodity prices, combined with a rebound of imports, dragged the trade surplus to 'only' $1.3bn. While 'normalisation' is likely ahead,

the data to date implies a large net export drag on Q1 real GDP, and risk to our forecast Q1 current account surplus.

Paul Dales, Capital Economics:

The sharp drop in the trade surplus in January suggests that net exports will provide a

sizeable drag on growth in the current quarter. And while rising consumption goods imports suggest that the surge in commodity prices is boosting domestic demand, this won't transform the outlook for the economy. We retain our view that

real GDP will only grow between 2.0% and 2.5% this year.

Diana Mousina, AMP Capital:

Exports to China fell noticeably (accounting for around 43% of the total fall in exports) which could account for the decline in coal exports and are probably a

one-off impact from a change in the timing of the Chinese Lunar New Year holiday (which fell in January this year, rather than the usual February timing). The volatile category of non-monetary gold exports also fell significantly in January.

This is source I found from another site, main source you can find in last paragraph

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