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Annette Beacher, Chief Asia-Pacific Macro Strategist at TD Securities, notes that Australia’s June and June quarter retail sales outpaced TD and consensus expectations.

Key Quotes

“Sales rose by +0.4%/m (TD +0.4%, mkt +0.3%) while Q2 volumes jumped by +1.2%/q (TD +0.7%/q, mkt +0.8%/q).”

“Sales volumes growth occurred across all the states, led by NSW (+0.5%pts) and Vic (+0.4%pts).”

“This rebound will relieve the RBA as the pace of consumer spending tends to be the #1 risk to the Bank’s outlook. After decent Q2 trade, the RBA can maintain its glass-half full stance in next week’s Board statement and the Statement on Monetary Policy.”

“Our Q2 GDP tracking is +0.9%/q or 3.0%/y, with construction and Capex released at the end of the month. We see at least 3% GDP growth this year and next via non-mining investment, public infrastructure and exports.”