Retail Sales overview

Early Friday, the market sees preliminary readings of the Australia Retail Sales for September month at 00:30 GMT. Market consensus suggests an upbeat MoM print of +0.2% versus -1.7% prior readings, suggesting the first positive figure in the last four months.

Given the recently strong inflation data and firmer Aussie treasury yields, coupled with easing lockdown restrictions in Australia, today’s Retail Sales figures become more important for AUD/USD traders.

Ahead of the data, TD Securities said,

We expect retail sales to rebound in Sep by 0.8% m/m (cons: 0.3%), reversing 3 consecutive months of decline due to the prolonged state-level lockdowns. The lift in consumer sentiment and optimism over reopening plans should provide a boost to spending. Additionally, spending in QLD should spring back given the looser restrictions in the month after the mid-month lockdown in South East QLD in Aug. The strength of the bounce back in retail spending will be closely watched in the coming months with NSW and VIC relaxing most restrictions in October and could bolster expectations that the economy on a much stronger recovery path than the RBA anticipated.

How could it affect AUD/USD?

AUD/USD consolidates the weekly gains around the highest levels since July, down 0.18% on a day around 0.7530 ahead of the data release. In doing so, the risk barometer pair justifies the cautious mood in the market amid an absence of a deal on US President Joe Biden’s $1.75 trillion infrastructures spending plan. The market sentiment also sours amid inflation fears before the releases of the Core Personal Consumption Expenditures (PCE) - Price Index data for September, the Fed’s preferred measures of inflation.

That being said, Australia’s Retail Sales figures need to follow the early week’s strong inflation numbers to push the RBA policymakers towards rejecting the “no change in the cash rate until 2024” phrase. The same could bolster AUD/USD prices towards the fresh multi-day top. In an absence of this, the RBA Governor Philip Lowe’s comments giving higher importance to the wage growth may regain the market’s attention and join the current risk-off mood to weigh on the quote.

Technically, AUD/USD remains sidelined until staying between 200-DMA and monthly support line, respectively around 0.7560 and 0.7500.

Key Notes

AUD/USD consolidates gains above 0.7500 ahead of Aussie Retail Sales 

AUD/USD Forecast: Another leg north likely ahead of the weekend

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.

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