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(CEP News) - Aside from weekly Japanese investment data, markets will turn to Australia for the release of May's trade balance report. Australia's trade balance showed a deficit of A$957 million with exports rising 5.8% and imports falling 2.2% the previous month.
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 retail sales will be under the microscope as Australia struggles with inflation pressures. TD securities economist Charmaine Buskas predicts retail sales to drag down in May. "Retail sales growth has borne the brunt of tighter financial conditions while higher petrol, food and dwelling costs have siphoned disposable income away from discretionary expenditure. The decline in employment in the month is likely to act as a further drag on overall spending. TD Securities looks for retail sales to decline by 0.3% in May," wrote Buskas. All times in EDT. Tuesday 19:50 JN Monetary Base (Y/Y) June Prior: -0.9% 21:00 AU DEWR Skilled Vacancies (M/M) June Prior: -0.1% 21:30 AU Retail Sales May Exp: +0.1% Prior: -0.2% 21:30 AU Building Approvals (M/M) May Exp: -3.4% Prior: +7.8% 21:30 AU Building Approvals (Y/Y) May Exp: +7.2% Prior: +5.2% 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% By Steve Stecyk,
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, edited by Cristina Markham,
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