Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

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Wednesday, 5 April 2017

Another monster surplus?


Australia's international trade balance absolutely smoked market expectations in rising by 138 per cent in February to $3.574 billion, the second highest figure ever recorded (the highest was in December).

This is an extraordinary turnaround by anyone's measure.

As recently as December some economists and commentators were calling a recession risk based on a long string of deficits (the data lags quite significantly), yet now we have seen four consecutive surpluses totalling well over $11 billion cumulatively.

On closer inspection, though, the February result wasn't really quite as rosy as it first appears.

While exports were solid enough, imports fell 5 per cent, which probably reflects weaker consumption patterns.

On the exports side February was a fine month for services exports with a record $6.3 billion in credits, but the commodities picture was a bit more mixed.

A fair rebound in gold exports and the ongoing uptrend in LNG exports were offset by slightly less upbeat performance elsewhere (the commodities figures below are measured in original terms). 

Some resounding positive news is that a surge in Australian tourism continues to pull the trade services balance higher.

Exports on the rise

The value of commodity exports to China has been rebounding.

Smoothing the merchandise exports figures at the state level and on an annual basis we can see that exports from Western Australia have increased by 13 per cent year-on-year on elevated iron ore prices, while in Queensland export values are up 17 per cent as LNG exports ramp up from Gladstone.

Improving trade surpluses are now being notched in these two exporting states.

Look a bit more closely and you will find that towards the end of 2016 imports into the two most populous states began to slow, likely reflecting weaker demand for consumer goods. 

Partly for that reason, while it's undeniably positive to see trade surpluses back on the agenda after a hiatus, it's a qualified positive.

With Cyclone Debbie recently tearing through Queensland there may be a disruption to coal export volumes to take into account in late March, in turn introducing a downside risk to GDP growth forecasts for the March quarter.