Early Friday, the market sees the preliminary reading for the April month Retail Sales data from Australia at 01:30 GMT. Following the strong recovery in March, Aussie Retail Sales could ease to 0.5% versus 1.3% prior, per market consensus. It should, however, be noted that the RBA’s recently cautious tone and mixed data from Australia add importance to today’s data.
Ahead of the release, Westpac said,
We expect Australia April preliminary retail sales to be up 0.8%, with annual growth set to spike to an extraordinary 24%yr on base effects from last year’s lockdown. Consumer sentiment hit an 11 year high in April as the further relaxation of COVID restrictions and a strong housing upturn more than offset concerns about the expiring JobKeeper scheme and setbacks to vaccine rollouts. However, this may not see much of a boost to retail as reopening rebounds are driving a big switchback into spending to service sectors, outside the scope of the retail survey.
Analysts at TD Securities sound a little less upbeat on the data while saying,
We expect a pullback in retail sales in April at -1.0% m/m (Market consensus: +0.5%), from the 1.3% increase m/m in Mar. The snap lockdown in Perth in Apr is likely to drag down retail sales as seen from the sharp plunge in activity in WA from Google mobility data. Nonetheless, consumer sentiment (as measured by Westpac Consumer Confidence) in Apr at a multi-year high should provide some support for spending.
AUD/USD looks for fresh clues to extend the previous day’s heavy gains, the biggest in a week, while taking rounds to 0.7770, down 0.07% intraday, ahead of the key Aussie data. In doing so, the quote justifies a lack of major catalysts following an upbeat performance led by the risk-on mood.
Given the recently mixed Aussie data and an end to JobKeeper relief program in Australia, today’s Retail Sales may offer an extra reason to the AUD/USD traders to consolidate the recent gains. Though, RBA remains on the path of ignoring rate hikes before 2024, also rejects yield curve control if at all needed in the future, which in turn warrants caution from the bears.
Technically, AUD/USD remains in the range between 0.7820 and 0.7700-7690 area whereas in multiple tops marked since January guard the pair’s upside while the five-week-old rising trend line and 50-day SMA restrict the declines.
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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.
