Oz trade balance goes into red

Australia's trade deficit came in much as expected in May, but April's shortfall was revised to show the first surplus since 2002 thanks to huge price increases for the country's iron ore exports.

Investor reaction was muted as the Bureau of Statistics could only estimate the impact of increases in contract prices, some of which have yet to be settled. Yet analysts said there was little doubt that deficits would soon be a thing of the past.

"We can say with some confidence that the trade account is likely to be in the black for much of the rest of the year, which is a massive change for Australia," said Brian Redican, a senior economist at Macquarie.