When is Australia Retail Sales and how could it affect AUD/USD?


Retail Sales overview

Early Monday, the market sees preliminary readings of the Australia Retail Sales for May month at 01:30 GMT. Market consensus suggests a downbeat MoM print of 0.7% versus 1.0% prior readings.

Despite the upbeat Aussie inflation and employment data, RBA policymakers refrain from conveying the much-awaited bullish bias, which in turn highlights today’s Aussie Retail Sales data as an extra catalyst for the Oz nation’s activity report.

Also joining the release is the monetary policy meeting decision by the People’s Bank of China (PBOC). Ahead of the release Reuters’ survey said, “China’s benchmark lending rate is set to remain unchanged at its June fixing on Monday, but there are growing expectations of an interest rate rise in China after the U.S. Federal Reserve adopted a more hawkish tone.”

Westpac expects a 0.5% mark ahead of the release while saying,

The backdrop for May retail sales (11:30 am Sydney/9:30 am Singapore) will be renewed COVID turbulence following Victoria's move into a 14-day lockdown. That said, this occurred late in the month and was preceded by a lift in 'stockpiling' spending in the state. Our Westpac Card Tracker suggests Victoria's lockdown only impacted in early June. The card data for May was on the softer side but is a bit hard to interpret due to changes in the timing of Easter.

How could it affect AUD/USD?

AUD/USD consolidates recent losses amid a pullback in the US dollar while taking the bids around 0.7500, up 0.40% intraday, ahead of the stated events. In doing so, the risk barometer ignores mild losses of S&P 500 Futures and the third day of downside by the US 10-year Treasury yields.

Given the RBA’s cautious mood, coupled with a period comprising the snap lockdown in Victoria, the upcoming Retail Sales may test the latest recovery moves. It’s worth noting that the concerns over the Fed’s rate hike and tapering will join the broad rush to the risk safety towards the US dollar to keep the AUD/USD sellers hopeful even if the Aussie data print bullish signs.

Technically, unless crossing 200-day SMA level near 0.7555-60, not to forget the previous support line from December around 0.7580, AUD/USD prices remain directed to August 2020 top near 0.7420-15.

Key Notes

AUD/USD consolidates losses around 0.7500, Aussie Retail Sales, PBOC eyed

AUD/USD Forecast: No signs of bottoming despite extreme oversold conditions

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.

About PBOC Interest Rate Decision

The PBoC Interest Rate Decision is announced by the People´s Bank of China. If the PBoC is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the CNY. Likewise, if the PBoC has a dovish view on the Chinese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative, or bearish.

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