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Matthew Hassan, Research Analyst at Westpac, points out that Australia’s September retail report was on the soft side as monthly sales rose 0.2%, a touch short of the consensus forecast of 0.3% but in line with Westpac’s view.

Key Quotes

“Annual sales growth held at 3.7%yr but sales have been tracking closer to a 3.3% annual pace over the last six months. The detail showed gains in the month concentrated in food categories (up 0.5% on a combined basis) with non food retail declining 0.2%mth.”

“Sales volumes for the quarter were more underdone, rising 0.2% vs consensus and Westpac forecasts of a 0.4% gain and with Q2’s strong 1.2% gain revised back to a 1% increase.”

“The main surprise was around retail prices which rose 0.4% despite mostly subdued gains in the retail CPI components.”

“Overall, the soft Q3 result confirms some slowing in consumer demand in the quarter from the strong Q2. Vehicle sales also point to some softening although service sector indicators have held in more positive territory.”