Australia retail trade likely improved and trade deficit likely narrowed in May

The Australian Bureau of Statistics scheduled to release May external trade data on 2 July and retail trade data on 3 July. 

Iron ore export volumes from Port Hedland rose to a historical high in May, combined with the price rebound in the month, this should have propped up exports. Iron ore is Australia's biggest export, making up almost a fifth of total exports. 

Retail sales is expected to have mildly increased by 0.4% m/m in May after the mild drop in April. The central bank's 25bps rate cut in May boosted business and household sentiment and likely fed through.

External trade is expected to remain in deficit until the end of 2015, while retail sales will likely show a patchy improvement but remain subdued overall.

"The trade deficit is expected to have narrowed to AUD 900mn in May on higher iron exports, both in volume and value terms", says Standard Chartered.