Australia Retail Sales (Sep. Preliminary): Falls 1.5% MoM, AUD steady

Australia’s key release for today in the preliminary Retail Sales for September has just been released as follows by the Australian Bureau of Statistics, providing early estimates:

Key statistics

• The seasonally adjusted estimate fell 1.5% (-$448.6m) from August 2020 to September 2020. 
• In seasonally adjusted terms, Australian turnover rose 5.2% in September 2020 compared with September 2019. 

There were falls in turnover in Food retailing, Household goods retailing, and Other retailing, in September. Despite the month-on-month falls, these industries continue to trade at levels above September 2019. 

Every state and territory, except the Northern Territory, fell this month. NSW, Queensland, Western Australia, and South Australia, led the month-on-month falls.  

Victoria recorded a minor fall in September following a fall of 12.6% in August when the Stage-4 restrictions in Melbourne, and Stage-3 restrictions in regional Victoria were introduced. Victoria is the only state where turnover remains below levels recorded in September 2019.

In seasonally adjusted current price terms, the preliminary estimate shows the September quarter rose 6.8%. This follows a fall of 2.3% in the June quarter. Quarterly volume estimates will be included in the final release on 4 November 2020. 

AUD/USD update

AUD/USD was steady o the release, trading at 0.7062.

The currency has been under pressure of late as the Reserve Bank of Australia tips the hat towards further easing as soon as November's meeting. 

Yesterday, the RBA's Kent's rhetoric was the fuel that sent the Aussie over the edge.

He was mostly repeating Governor Lowe’s dovish stance of last week but apparently catching the markets off guard when saying that the benchmark BBSW rate might dip below zero:

RBA Kent's comments finally send AUD/USD through support

However, a risk-on session on Wall Street helped lift the currency back to test the structure, trimming losses to 0.7050 in late New York trade as follows:

Description of 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.