Commodity exports have buoyed the Australian economy, but TD securities economist Charmaine Buskas does not expect the current trade deficit to improve.

"Knowing that higher bulk commodity prices will boost exports while a weaker domestic economy will shrink imports in the second half of 2008 sets up the possibility of the trade accounts moving back into surplus. However, this is unlikely to occur in May. On a balance of payments basis, imports grew by 7.0% in the month. Even allowing for the impact of the bulk commodity price rises, the deficit is likely to widen by $170 million to -$1.1 billion," wrote Buskas in a note.

Australian exports and import data are also scheduled to be released. Exports are forecast to rise 5.8% due to Australia's mining sector, while imports are expected to fall 2.2%.

All times in EDT

Wednesday

19:30 AU AiG Performance of Service Index June Prior: 49.7

19:50 JN Foreign Buying Japan Bonds W/E June 27 Prior: -1312.6

19:50 JN Foreign Buying Japan Stocks W/E June 27 Prior: +¥34.2B

19:50 JN Japan Buying Foreign Stocks W/E June 27 Prior: +¥16.3B

19:50 JN Japan Buying Foreign Bonds W/E June 27

21:30 AU Trade Balance May Exp: -900M Prior: -957M

21:30 AU Exports (M/M) May Prior: +5.8%

21:30 AU Imports (M/M) May Prior: -2.2%

Thursday:

No data is expected to be released in Australia or Japan

By Steve Stecyk, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it

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