The week is kicking off with key data events early this week, making for some potential volatility on Monday in Asia. April retail sales will be released at 01.30 and at the same time, Aussie Q1 business indicators, that includes various data to help guide GDP forecasts, including business inventories, total wages and company profits. Westpac looks for GDP growth of 0.9%qtr, 2.8%yr.
Staying with retail sales, these had already disappointed in March, printing flat m/m, +3.1% y/y. The forecasts for today’s data release is for a 0.3% m/m gain in April.
“While overall business conditions surveys are upbeat, responses from retailers indicate difficult conditions,”
analysts at Westpac explained.
Analysts at ANZ:
- We expect another weak result (-0.1% m/m) for retail trade in April, following the disappointing flat outcome in March.
- With house price growth continuing to soften, and higher petrol prices eroding household budgets, we expect the consumer to remain under pressure.
- There is an upside risk around the early Easter date, which may have depressed March sales relative to April.
How could retail sales affect AUD/USD?
AUD/USD is back above the 10 & 21-D SMAs while the long lower wick on the daily candlesticks supports the bullish outlook. 0.7605/20 is a key zone to the upside. To the downside, 0.7515 guards 0.7470 and the May’s low is eyed below there.
Key notes:
AUD/USD Forecast: uncertainty reigns, range persists:
- AUD/USD seen advancing modestly next week, but a large number of bears remain around waiting for their chance.
- RBA expected to remain on hold, Chinese trade balance data more relevant this week.
About Aussie Retail sales:
The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and it’s considered as an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.
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