FXStreet (Bali) - AUD/USD is likely to record a second consecutive trade deficit in May, notes Sean Callow, FX Strategist at Westpac.

Key Quotes

"Australia is likely to record a second consecutive trade deficit in May, though again much smaller than the surpluses of Q1 (11:30am Syd/9:30am Sing/HK). We look for a -0.6% decline in total imports, with goods imports already reported -1%. But exports are seen -1%, with iron ore exports likely to be hurt by both lower prices and volumes. This would produce a deficit of –AUD250mn, vs -122mn in Apr. We are close to the median forecast of -200mn but the range of forecasts is a puzzlingly wide -1.1bn to +0.53bn."

"RBA’s Debelle is due to speak in London from 12:05pm local time, with no topic set. Debelle often comments on AUD so there will be plenty of attention on his appearance, even ahead of Governor Stevens’ speech tomorrow."

"The Asian calendar is relatively quiet, with the Singapore PMI not a market mover. In the US, the main event is the June ADP private payrolls, which should give an indication of non-farm payrolls tomorrow. We are expecting this to come out slightly stronger than last month, at 190k vs 179k. Our forecast for May factory goods orders is -0.4%, weaker than the last print of 0.7%; durables for the month were -1%, and comprises a large part of the total. Fed Chair Yellen is to deliver a lecture at the IMF in Washington. In the UK, June PMI construction will be released, and in Canada, the June factory PMI. Both are expected to show slight slowing since late last year."

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