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Retail Sales overview

Early Friday, the market sees June month Retail Sales data from Australia at 01:30 GMT. Even though recent improvement in the Aussie inflation data pushes markets towards expecting 0.3% increase in seasonally adjusted MoM reading, versus 0.1% prior, current trade tension and sluggish prints of early job market indicators highlight the bears’ power.

It should also be noted that traders may observe the second quarter (Q2) Producer Price Index (PPI) data, up for publishing at the same time, in order to better confirm the momentum. The PPI is expected to soften from 0.4% to 0.3% on QoQ basis while unlikely to change from 1.9% on YoY.

Westpac expects no change from the May’s 0.1% mark ahead of the release,

Westpac looks for a mere 0.1%mth rise in nominal turnover, the same as in May and below consensus of 0.3%. Slow wages growth and soft consumer sentiment even with the RBA rate cut suggest another underwhelming month.

Elsewhere, TD Securities seem following the trend with 0.3% consensus as it says:

For June retail sales we are expecting a 0.3% m/m gain, an improvement on the +0.1% m/m print for May, that keeps annual growth in retail sales at 2.4%. We anticipate real retail sales rose 0.2% q/q, well below recent averages as activity likely slowed into the Federal election.

How could it affect AUD/USD?

Given the latest trade war signals from the US, prices are more likely to remain under pressure considering Australia’s strong trading ties with China. However, an upbeat Retail Sales data could push the Reserve Bank of Australia (RBA) towards rethinking on their further rate cut plans, which in turn can offer intermediate pullback to the Aussie.

Technically, an upside beyond June month low of 0.6831 can trigger short-covering moves targeting 0.6860 and 0.6900 round-figure whereas a downside break below latest low surrounding 0.6794 can push sellers in the direction to January month low of 0.6684.

Key Notes

AUD/USD nosedives to fresh 7-month low amid trade tension, all eyes on Aussie data

AUD/USD Analysis: no mercy for the Aussie

About Australian 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.