Trade Desk Thoughts - U.S. Trade Balance

Trade Balance (Aug) Actual -$59.1B, Expected -$59.5B, Previous -$62.2B

Release Explanation: A country's exports minus its imports; the largest component of a country's balance of payments. An increase or decrease in the Trade Balance will help determine the future economic outlook and growth numbers in a region. It can impact all aspects of an economy as it is the way that region balances its books. This is a stand alone valuation of the reliance, or not, of imported Goods compared to what is being sent abroad. A currency will be greatly impacted by this report as the costs of buying Imports, or selling Exports, is reliant upon a currency's valuation to a degree. A country that Exports more than it Imports (China for example) will benefit from a weaker currency; its Exports are cheaper for foreigners to buy, and vice verser.

Trade Desk Thoughts: The trade deficit declined 3.5% in August, as both imports and exports declined. The decline in exports was the first in five months, but the amount of exports was still the second highest on record. August exports were $3.4B less than July exports of $168.1B. August imports were $5.5B less than July imports of $229.4B.

In August, the goods deficit decreased $3.2B from July to $70.9B, and the services surplus decreased $1.0B to $11.8B. Exports of goods decreased $3.2B to $117.6B, and imports of goods decreased $6.4B to $188.5B. Exports of services decreased $0.2B to $47.1B, and imports of services increased $0.9B to $35.3B.

Forex Technical Reaction: S&P futures were recently down 3.25%. During the overnight session, the dollar gained on the euro and pound and fell against the yen, reflecting a general move towards risk aversion.

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