Aussie retails sales miss expectations and Financial Stability Review arrives (AUD -10%)


  • Retails sales: A softer than the expected after a notably weak -0.1% MoM, and 2.4% YoY in July.
  • The Financial Stability Review: Despite these risks, the financial system is generally resilient.

The Aussie is flat following the release of the Australia August Retail Sales that have just arrived, normally a data set that causes a decent move, but ahead of the Nonfarm Payrolls later today, the markets are thin and traders are sitting on their hands waiting for the outcome. 

We had a softer than the expected after a notably weak -0.1% MoM, and 2.4% YoY in July.

The data arrived as follows:

0.4% MoM  (estimate 0.5% ; previous -0.1%).

At the same time, the biannual RBA Financial Stability Review was released and we now await RBA Assistant Governor (Economic) Ellis who speaks in Geelong, 1:20 pm AEST.

About Retail Sales

They are 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.

The Financial Stability Review 

  • In Australia, yields have fallen substantially with asset prices rising further.
  • The cuts to the cash rate, and the resulting reductions in borrowing rates, have contributed to a turnaround in some established housing markets.
  • Despite slower economic growth domestically, businesses' profitability has remained around its historical average.
  • A downturn in the global economy, asset price falls or reduced availability and increased cost of borrowing could be quickly transmitted to Australia through trade and financial links.
  • In the current environment, there are many possible triggers for dislocation in financial markets.
  • In the near term, risks from falls in housing prices have reduced but still exist. 
  • Despite these risks, the financial system is generally resilient.

About the Financial Stability Review

The Financial Stability Review provides the Bank's assessment of the current condition of the financial system and potential risks to financial stability. It contains a number of boxes on topics of special interest, along with occasional articles. The Review is issued half-yearly.

 

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