Goods trade balance narrows to $6.8 billion in September

The news: Australia's trade balance on goods narrowed sharply from $10.1 billion to $6.8 billion in September, driven by industrial transport equipment imports.

The numbers: Imports surged 7.5%, or $2.7 billion, while exports fell by $658 million (1.4%), driven by a drop in non-monetary gold. It was the lowest trade balance on goods since coming in at $6.2 billion in March 2021. The $6.8 billion figure significantly undershot analyst expectations of $9.5 billion. The Australian dollar has continued an upswing that began yesterday afternoon, and is trading at around 64.2 US cents.

The context: The likely one-off spike in high-value capital goods imports means the figures are unlikely to be too much of a concern. Also, expectations are rising for a rate hike at the Reserve Bank's meeting next Tuesday, which would strengthen the Aussie dollar and potentially take some of the sting from import costs.