Trump wins the US presidential election, while the Republicans are looking for a clean slate
On Wednesday, Donald Trump completed his political comeback and returned to the White House for a second term. Investors responded positively to the election win. In addition, Republicans secured control of the U.S. Senate and attempted to maintain control of the House of Representatives. A clean slate could give Trump the political leverage for unhindered policy implementation.
Australian trade signals weaken demand
On Thursday, Australian trade data piqued investor interest as the surplus fell from A$5.284 billion to A$4.609 billion. Significantly, imports and exports fell by 3.1% and 4.3% respectively, signaling weaker demand.
The latest trading data could influence the RBA interest rate path. Australia has a trade ratio of over 50%, with 20% of the workforce in trade-related jobs. Trade conditions could deteriorate further after Trump’s election victory. The president-elect warned of high tariffs on China and possible tariffs on other regions, including the EU.
Expert views on Australian trade
Commenting on the Australian trade data, AMP head of investment strategy and chief economist Shane Oliver said:
“Aust Sept, the goods trade surplus fell to $4.6 billion, with exports -4.3% mom (due to lower commodity exports) and imports -3.1% mom. Net export volumes are expected to contribute around 0.3 percentage points to GDP growth in September.”
Chinese exports rise in October; Imports reflect weaker demand
Chinese trade data also had to be taken into consideration amid concerns about Trump’s threat of 60% tariffs on Chinese goods. Exports rose by 12.7% year-on-year in October, compared to 2.4% in September. However, imports fell by 2.3%, after rising by 0.3% in September. The declining imports indicate a weakening demand environment, which may have consequences for the Chinese economy and global trade.