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3 Sep 2015
Australia: Posts record CAD and highest ever trade deficit - Nomura
FXStreet (Delhi) – Charles St-Arnaud, Research Analyst at Nomura, notes that the Australia has posted the biggest current account deficit since Q4 2009, with most of the deterioration coming from the biggest on records goods and services trade deficit which totalled around A$9.6bn.
Key Quotes
“Australia’s current account deficit widened to A$19.0bn in Q2 on a seasonally adjusted basis. This was the biggest current account deficit since Q4 2009.”
“Most of the deterioration came from a wider goods and services trade deficit of A$9.6bn, the biggest on record. The income deficit also widened somewhat to A$9.0bn.”
“The deterioration of the goods and services balance was mainly the result of a wider goods deficit (-A$7.9bn), the biggest since Q1 2008, while the services deficit narrowed slightly to A$1.8bn. Net FDI flows decreased in Q2 to A$8.6bn.”
“Nevertheless, despite an increase in the yield differential between ACGBs and USTs on the quarter, demand for Australian bonds weakened, likely because of concerns regarding the impact of further AUD depreciation on return. Net portfolio flows showed net inflows of A$18.2bn in Q2, after net inflows of AU$21.4bn in Q1.”
Key Quotes
“Australia’s current account deficit widened to A$19.0bn in Q2 on a seasonally adjusted basis. This was the biggest current account deficit since Q4 2009.”
“Most of the deterioration came from a wider goods and services trade deficit of A$9.6bn, the biggest on record. The income deficit also widened somewhat to A$9.0bn.”
“The deterioration of the goods and services balance was mainly the result of a wider goods deficit (-A$7.9bn), the biggest since Q1 2008, while the services deficit narrowed slightly to A$1.8bn. Net FDI flows decreased in Q2 to A$8.6bn.”
“Nevertheless, despite an increase in the yield differential between ACGBs and USTs on the quarter, demand for Australian bonds weakened, likely because of concerns regarding the impact of further AUD depreciation on return. Net portfolio flows showed net inflows of A$18.2bn in Q2, after net inflows of AU$21.4bn in Q1.”