Australian trade data for December came in very close to expectations. The trade surplus narrowed to $12.24bn from an upwardly-revised $13.47bn but remains elevated. Exports of goods and services fell 1.4% m/m, the third consecutive monthly fall, due to other mineral fuels. Imports rose 1% m/m after declining the previous three months, driven by travel services. There isn’t anything in the trade data to concern the RBA.

• Exports of goods fell 1.5% m/m but remain at a high level and services -0.4% and are yet to reach their pre-Covid level. Rural exports were down due to weak cereals shipments and non-rural due to other mineral fuels and metal ores. Passenger transport services fell 15.9% m/m.
• Good imports rose 0.2% m/m with consumer goods +1.5% (transport) and capital +12.2% (broadbased). Services imports are at their pre-pandemic levels and rose 4.4% m/m in December due to a 24.9% increase in travel services.
• Australia saw strong exports to Japan, Korea and Taiwan. Exports to China rose 17.8% y/y down from 36.8% in November.
• The quantity and unit values of iron ore exports were higher in December. Shipments rose to China and Korea. While thermal coal prices were down, export quantities rose strongly, especially to Korea, India and Chile.

Source: MNI - Market News/Refinitiv