Australia's unexpected record trade surplus

hot gossip - When is good news seen as bad, and yet still good?

When is good news seen as bad? When you see the trade surplus figure below!
Australia's trade surplus unexpectedly reached a record in June as Chinese demand spurred exports of coal and iron ore, while imports stagnated amid a slowdown in domestic spending.
The excess of exports over imports reached AUD$3.54 billion, a Bureau of Statistics report showed in Sydney today. A separate report showed house-price gains decelerated in the second quarter, underscoring the impact of the central bank's six interest-rate increases since early October. An example of this is a client of ours at Ronin who told us this week that the value of his house at Palm Beach in Sydney had been devalued to the tune of 30%, ouch.
This has lead to the creation of a new term, "the two speed economy" in which domestic spending has been throttled back and yet external spending (China buying coal and steel) had almost doubled, giving concern that the RBA may raise rates again in an attempt to slow any gain in inflation caused by the flood of money coming in to the country.
Exports gained 7 percent in June to AUD$26.7 billion, today's report showed. Sales of metal ores including iron surged 23 percent and coal shipments jumped 15 percent.
Today's trade surplus, the largest since the statistics bureau began measuring the balance in 1971, has expanded for three straight months, ending 11 consecutive months of deficits.
It is true that the policy makers did expect that a trade surplus was inevitable after the GFC proved to be very short lived in Australia it is also true that this surge was not expected to be as large as we have seen.
The other concern running around in the back of the RBA's mind is the effect of NOT having a mining super tax, and let's be realistic if the Labor party wins the next election I think it is safe to say they have been really stung by the backlash from both Queensland and WA, and thus it will be allowed to stay well and truly buried in the pile of things to think about, never to see the top of that pile.
And yet still Good?
All that being said we feel this is good news for traders as the miners are still out there digging holes and that's good. The banks are lending money and that's good. You can't make a good return on your property so your money goes into the market and that's good.