When are the Australian retail sales/ trade data and how could they affect AUD/USD?

Australian retail sales/trade balance overview

A slew of mixed data and the RBA’s understatement of growth pushed Aussie traders on edge ahead of main event risks in the form of monthly retail sales and trade balance data slated for release at 11:30 am Syd/8: 30 am Sing/HK and 00:30 GMT on Wednesday.

Australia's seasonally-adjusted monthly retail sales are expected to rise +0.2% in February versus the previous reading of +0.1% growth. On the other hand, the consensus forecasts are calling for Australia's February month balance of trade to flash a soft figure of $3.8 billion AUD, down from the last reading of AUD 4,549 million. The Australian exports in January last came in at +5.0%, while Imports for the same period arrived at +3.0%.

While latest reports on retail sales and trade balance were positive, various banks have their own forecasts for the current data ahead of the release.

Westpac seems upbeat on trade balance but not the same while looking at retail sales. It says,

Consensus is for a pickup to 0.3%mth in Feb but Westpac is on a gloomy -0.1%, given poor consumer sentiment, including survey detail showing elevated risk aversion. The industry breakdown in Jan also concerned us, with poor sales in discretionary categories.

Australia’s trade balance is a much more positive story. Dec 2018 and Jan 2019 were the second- and third-largest surpluses on record, with Jan A$4.5bn. We look for -0.9%mth on exports, as falls in gold and coal offset gains for iron ore, while imports may have risen 1.1%, led by fuel. This would trim the surplus to a still historically very large $3.8bn. The median forecast is $3.7bn.

On the other hand, TD Securities has its own belief as follows:

Retail sales are expected to lift by 0.2%. After the recent Dec qtr private consumption report revealed that spending tended to be on services and no net spending on goods, we don’t expect a lot of growth in this report. The February trade surplus is expected to be relatively steady at +$A4.9b. We expected exports to correct by -1.5%/m after the surprise blockbuster +6.2%/m in Jan, while imports pullback by a decent -3%/m taking the signal from the Chinese trade report, showing a holiday slump in exports to Australia in February (that is not quite seasonally adjusted away).

How could they affect the AUD/USD?

While recently positive data from China and optimism surrounding the US-China trade deal haven’t been highlighted by the Reserve Bank of Australia (RBA), traders might take serious note of the scheduled data if negative outcomes arrive.

Technically, the AUD/USD pair can take rest around 0.7050 in case of soft data but further weakness beneath the same support could drag the quote towards 0.7015 and 0.6980 important rest-points. Alternatively, 0.7075 and 50-day simple moving average (SMA) around 0.7120 can act as immediate resistances for the buyers to watch in case of positive data.

Key Notes

AUD/USD slumps to multi-week lows on broad USD strength, trades below 0.7060

AUD/USD Analysis: RBA weighed the Aussie, China can save it

About the 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.

About the Australian trade balance

The trade balance released by the Australian Bureau of Statistics is the difference in the value of its imports and exports of Australian goods. Export data can give an important reflection of Australian growth, while imports provide an indication of domestic demand. Trade Balance gives an early indication of the net export performance. If a steady demand in exchange for Australian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.