AUSTRALIA DATA: June Gold Exports Drive Increase In Trade Surplus
The June merchandise trade surplus widened more than expected in June to $5365mn from a downwardly-revised $1604mn. There was a jump in exports while imports contracted. The surplus remained in the range it has been in since March 2024.
Australia merchandise trade surplus A$mn
Source: MNI - Market News/ABS
- The 6% m/m rise in goods exports was driven by a 36.7% increase in non-monetary gold but there was also growth in metal ores (+2.3%) and coal (+17.3%). Rural exports fell 0.1% m/m to be up 11.7% y/y while non-rural rose 3.1% but are down 6.3% y/y. Total exports are up 2.6% y/y after declining 2.8% y/y in May.
- Merchandise imports fell 3.1% m/m with the weakness across the major sectors but they are still up 3.1% y/y down from May’s 6.6% though.
- Capex fell 9.1% m/m driven by equipment & other goods to be flat on the year, while consumer items shrank 5.5% m/m due to vehicles but still grew 4.1% y/y. The data are volatile and the 3-month averages suggest some pickup on both components over Q2.
Australia goods exports vs imports y/y% 3-mth ma
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
AUSTRALIA DATA: NAB Business Conditions Up Firmly In June, Wages Remain Benign
The Australia NAB survey of business conditions for June showed notable improvement. We rose to +9 from flat in May. This is the highest print since March last year. Business confidence also rose, up to +5, from +2 in May. The first chart below plots the NAB business conditions index (the white line on the chart) against Australia y/y GDP growth.
- In terms of the underlying conditions in the survey, trading rose to +15, from +5. Profitability improved to +4, from -5, while employment was +3, from +1 prior. Forward orders were flat, versus -2 in May. Capex rose to +10 from +6 prior. Exports and exporter sale conditions remained negative though.
- Wage conditions were little changed at 1.5%. The second chart is this sub-index on wages versus the quarterly ABS wage outcome (in y/y terms). It is still suggesting a benign wages backdrop.
- The data, particularly from an activity standpoint, is encouraging, but is only one monthly print, and the RBA is likely to want to see firm evidence of improvement in real activity outcomes.
Fig 1: NAB Australia Business Conditions & GDP Y/Y
Source: Bloomberg Finance L.P./MNI/Bloomberg
Fig 2: NAB Australia Business Survey On Labour Costs & Wages Y/Y
Source: Bloomberg Finance L.P./MNI/Bloomberg
STIR: RBNZ-Dated OIS Firmer Than Pre-RBNZ Decision Levels (May)
RBNZ dated OIS pricing is little changed across meetings today, ahead of tomorrow's RBNZ Policy Decision.
- 3bps of easing is priced for this week's meeting, with a cumulative 32bps by November 2025.
- Notably, pricing is 9-15bps firmer across 2025 meetings compared to pre-RBNZ decision levels on May 28.
Figure 1: RBNZ Official Rate Profile Vs. Expected Dec-25 Level
Source: Bloomberg Finance LP / MNI
FOREX: JPY Crosses - Ignore Headwinds And Challenge The JPY Longs
Stocks have had an unbelievable run forcing an underweight market to get back in. In the short term it looks a little stretched now and the shorts have been carried out making positioning no longer an issue. Could these tariffs and the threat it poses to global growth be the catalyst now for some reversion back to the mean ? The JPY is underperforming in the crosses which is very unusual considering the way risk is trading and points to a positioning issue with JPY longs being challenged.
- EUR/JPY - Overnight range 170.32 - 171.32, Asia is trading around 171.65. The pair had all the ingredients for a pullback but the move higher has accelerated even in the face of these headwinds. Very interesting price action with first support now back towards the 169.00 area.
- GBP/JPY - Overnight 197.20 - 199.00, Asia trades around 199.25. The pair is challenging the 199.00/200.00 resistance a break of which will see more JPY longs pared back. Like the EUR/JPY with risk showing cracks for the first time you would have been excused for thinking this pair should have been stalling and potentially drifting lower but positioning looks to be an issue.
- NZD/JPY - Overnight range 87.05 - 87.77, Asia is currently dealing 87.85. NZD/JPY is back to testing the resistance around 88.00, a break of which could see momentum return to extend higher. Again these moves are happening with some clear headwinds.
- CNH/JPY - Overnight range 20.2165 - 20.3720 Asia is currently trading around 20.3770. A big reversal from the 20.50/20.60 resistance area. In the middle of its recent range awaiting clearer direction with a bias to sell rallies.
Fig 1 : GBP/JPY Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
