Australia’s current accounts balance fell by $4.4 billion to a deficit of $10.7 billion in the June quarter, according to the Australian Bureau of Statistics, as exports of goods fell 4.4 per cent largely on the back of lower prices of iron ore and coal.

The current account deficit, which shows Australia sends significantly more money abroad than it receives from offshore, came in well above market forecasts, suggesting exports will contribute less than expected to the nation’s GDP figures set to be released on Wednesday.

“This quarter’s current account deficit was the largest since June quarter 2018, reflecting continued falls in bulk commodity prices and higher income paid to non-residents,” said Tom Lay, the head of international statistics at the ABS.

In markets overseas, Wall Street was closed for the Labor Day holiday.

In Europe, the STOXX 600 index was little changed at 524.94 points, still hovering around its record highs touched last week after data showed eurozone inflation fell to its slowest pace in three years. Germany’s DAX rose 0.1 per cent, London’s FTSE lost 0.2 per cent and the CAC in Paris added 0.2 per cent.

Stocks rose in Germany even as state elections saw wins for the far-right Alternative for Germany (AfD) and leftist populist Sahra Wagenknecht Alliance (BSW), a heavy blow for Chancellor Olaf Scholz’s already fragile ruling coalition.

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“(German state elections) are partly a loud political wake-up call before the parliamentary elections in September next year ... that Germany and France – the European Union’s leading duo – are moving towards growing political instability and weakness should worry the entire EU,” analysts at SEB wrote in a note.

However, the region’s aerospace and defence sector slumped over 2.4 per cent, its worst day in two months, weighed down by shares of Rolls-Royce.

The British company, the sole engine provider for Airbus’ A350 jetliner, slumped 6.5 per cent in its worst day since May 2023 after Cathay Pacific Airways said it had started a fleet-wide inspection of its A350 aircraft after identifying an engine component failure. Airbus shares fell 1.4 per cent.

Among other individual movers, shares of Volkswagen rose 1.7 per cent after the company said it was considering closing factories in Germany for the first time.

Rightmove jumped 27 per cent after Australia’s REA Group, the property listings company majority-owned by News Corp, said it was considering buying the British firm.

More economic data from the region, speeches from ECB officials and US payrolls data on Friday will be closely watched throughout the week.

With Reuters

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