Iron ore windfall continues

Record exports

The Aussie consumer may be dithering, but there's not much wrong with Aussie dollar commodity exports.

Total exports rose 3 per cent to hit a record high of $43.2 billion in September. 

Imports were also up 3 per cent in September to $36 billion, and as such the trade surplus is still running at close to record levels. 

There's been a tidy boost from A$ gold, but this huge windfall has mainly been derived from iron ore, with A$ exports averaging more than $9 billion per month FOB for the past five months.

The lower Aussie dollar is still supporting tourism, as well as encouraging more holidays at home.

And Gladstone LNG has helped bring Queensland's merchandise exports into a comfortable trade surplus position, while Western Australia's trade surplus is heading to the moon on the iron ore bonanza. 

On the stock exchange Fortescue Metals Group (ASX: FMG) has ripped to a record high close at $9.51.

Overall, very strong exports figures, which may pare back a little in the coming months as Brazil's Vale comes back online. 

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In other news NAB's FY19 results showed that post-APRA's changes all of the improvement in lending volumes has been to homebuyers rather than investors.

That's not a surprise. 

In fact, I predicted exactly that outcome in in June at Livewire Markets here.

But one wonders when the majors will become twitchy about their crimped profits and lost market share.

On a related note, Westpac informed brokers today that it would revise some of its clunky use of the HEM calculator for investors, which effectively represents a modest loosening for investment loans.

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Right on cue, Commonwealth Bank has just announced that it will reduce its serviceability rate from 5.75 per cent to 5.40 per cent, effective November 9.

I also wrote about why this would become an important issue in H2 2019 at Livewire Markets.