Global Trade: US Trade Deficit Hits New Decade Low; Russia Cuts Oil Export Duties
Plus, forget "Fishageddon" because "Tomatopocalypse" could be worse, and more!
This column highlights the past week's most interesting and useful business and financial commentary on global trade from around the Web.
The Desert Sun
Link: US Global Trade Deficit Hits Unexpected New Decade Quarterly Low
"Remarkably, this latest three month total ratio, as a percentage of gross domestic product during the 2012 second quarter, was $117.4 billion or 3%, a low point not reached in the past decade. This positive figure continues to reflect strong US exports, weaker imports and increased earnings on overseas assets by American investors."
Wall Street Journal
Link: Australia's Trade Deficit Widens
"Australia's trade deficit expanded to its widest level in more than four years as export earnings from industrial commodities shrank, further evidence that a mining boom that has propelled the economy in recent years is losing steam."
Link: China Trade Surplus Downplayed by WTO
"With the changing nature of global trade, a new way to measure bilateral trade balances will see China's surplus with the United States reduced by half, said World Trade Organization Director-General Pascal Lamy on Monday."
Link: South Korea Factory Slump Deepens, Data Show
"Manufacturing data for South Korea out Tuesday showed a sharp decline in orders and activity, and economists say there's likely more gloom in store for the global trade bellwether.... HSBC's Purchasing Managers' Index for September printed at 45.71 on a 100-point scale, compared with 47.5 in August.
Link: Brazil Trade Surplus Shrinks on Weaker Commodity Prices
"Brazil trade surplus narrowed for the sixth straight month to $2.557 billion in September, official data showed o n Monday, as a slowing global economy undermined prices of the commodity powerhouse's key exports...A fall in both volume and prices of exports such as iron ore and sugar has weighed on Brazil's trade surplus this year, causing the government to forecast zero growth in exports at best."
[Many investors have exposure to iron ore prices through Market Vectors Steel ETF (NYSEARCA:SLX) and to sugar through the Teucrium Sugar Fund (NYSEARCA:CANE).]
Journal of Commerce
Link: Japanese Exports to US Surge 10.3%
"Japan is now the world's third-largest economy after the US and China and is heavily dependent on exports for growth. The US is Japan's second-largest trading partner after China."
Hellenic Shipping News Worldwide
Link: Russia to Apply More Cuts in Oil Exports Duty
"The Russian government has offered to cut export duty for more remote oilfields in a move aimed at boosting crude output in the world's largest oil producer and generating more revenue for state coffers. [Rosneft (MCX:ROSN) and Lukoil (PINK:LUKOY) are Russia's two biggest oil companies.]
Link: US High-Tech Executives Appear More Confident About Global Trade and Exports
"Some 85% of US high-tech executives said the Obama administration's goal to double exports by 2014 is either 'very likely' or 'somewhat likely' to be achieved, according to a recent survey undertaken for United Parcel Service (NYSE:UPS)... These new percentages compare to a much lower 40% confidence level about the goals found two years ago."
Link: WTO Chief Suggests Trade Rules Can't Address Currencies, Capital Controls
"The head of the World Trade Organization suggested Monday that global trade rules can't properly address disputes over currency manipulation or capital controls, issues that have come under debate amid the rise of emerging powerhouses such as China and Brazil."
Link: Rest in Peace the FX Carry Trade -- HSBC
"Such a simple beast, the carry trade has long been one of the most popular currency trading strategies and involves taking advantage of global interest rate differentials by exchanging a low-yielding currency for a higher-yielding one....But those days are long gone, HSBC (NYSE:HBC) said in a note to clients."
New York Times
Link: Ammunition for a Trade War Between US and Mexico
"The United States Department of Commerce signaled then that it might be willing to end a 16-year-old agreement between the United States and some Mexican growers that has kept the price of Mexican tomatoes relatively low for American consumers. American tomato growers say the price has been so low that they can barely compete."