“Australia posted its narrowest trade deficit in 10 months and home prices jumped by the most in 2 1/2 years, supporting the case for the central bank to leave interest rates unchanged today.
Imports outpaced exports by A$427 million ($446 million), led by stronger iron-ore shipments, from a revised A$2.79 billion deficit in November, the Bureau of Statistics said in a report in Sydney today. A separate report showed house prices advanced 1.6 percent in the three months through December, the most since mid-2010.
Investors are pricing in a 78 percent chance central bank Governor Glenn Stevens will leave the overnight cash-rate target at 3 percent, pausing after six reductions totaling 1.75 percentage points since November 2011. The Reserve Bank of Australia releases its first monetary policy decision of the year at 2:30 p.m. in Sydney.
“The data are pretty positive,” said Alvin Pontoh, an Asia-Pacific strategist at TD Securities Inc. in Singapore.’’ “The increase in house prices certainly supports the RBA remaining on hold.”
The Australian dollar rose to $1.0444 at 12:30 p.m. in Sydney, from $1.0442 before the data were released.
The median estimate in a Bloomberg News survey of 24 economists was for a trade shortfall of A$800 million. For the house-price report, the median forecast of 15 economists was a 0.3 percent rise.
