July 03, 2008 at 6:00 am by Tom Lydon
Australia and the related exchange traded funds (ETFs) can enjoy the latest news that the country’s trade deficit narrowed to the smallest gap in 15 months in May, as coal shipments boosted exports.
Jacob Greber for Bloomberg reports the shortfall narrowed to $866 million from $921 million in April, according to a median estimate among 24 economists at Bloomberg News.
Record prices for natural resources such as iron ore and coal supports the central bank’s view that the economy will be boosted by 20% from a surge in overseas demand. Also supported by this news could be the iShares MSCI Australia Index (EWA) along with NETS Trust (AUS).
EWA is down 11.8% year-to-date, while AUS is down 5.2% since its April 10 inception.
As bulk commodity prices see massive increases the Australian trade deficit could turn into a surplus later this year.
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