The World Trade Organisation’s Goods Trade Barometer falls – ANZ

Analysts at ANZ Bank noted that the World Trade Organisation’s Goods Trade Barometer fell to 95.5 in February from 96.6 in November, well below the index’s baseline of 100 and suggesting global trade in goods is likely to remain weak in early 2020.

Key notes

"WHO note that “the drop in the barometer since November has been driven by additional declines in indices for container shipping (94.8) and agricultural raw materials (90.9), as well as the plateauing of the automotive products index (100.0)."

"Although indices for export orders (98.5), air freight (94.6) and electronic components (92.8) are all below baseline, they appear to have stabilized and would normally be expected to rise in the coming months. However, every component of the Goods Trade Barometer will be influenced by the economic impact of COVID-19 and the effectiveness of efforts to treat and contain the disease”. "

"There is plenty of downside in the pipeline."

FX implications

There are mixed feeling on the virus – more on this below:

• Coronavirus peaking? How will it impact the Chinese & wider economies and FX?