US: Trade deficit rose to $48.7bn in October - Nomura

The US trade deficit rose to $48.7bn in October, slightly higher than expectations (Nomura: $46.4bn, Consensus: $47.5bn), driven by an increase in the goods trade deficit, explains the research team at Nomura.

Key Quotes

“Consistent with the advanced goods trade balance report, food & beverage goods exports declined sharply by 11.2% m-o-m, widening the goods trade deficit. Almost all of the decrease in food & beverage exports can be attributed to a sharp 45.7% decline in soybean exports. This series exhibits an unusual seasonal pattern and the large deviation could imply some payback for November’s trade data. However, exports of capital goods, autos and consumer goods also showed modest declines. Overall, goods exports fell 0.2% m-o-m in October while imports rose 1.8% m-o-m.”

“GDP tracking update: In yesterday’s trade balance report, goods exports were revised up strongly. However, net exports of capital goods were slightly weaker than our assumptions, suggesting that Q3 equipment investment may be stronger than previously expected. Altogether, we raised our Q4 GDP tracking estimate 0.1pp to 2.9% q-o-q saar.”