Analyst responses to Australian data coming in - retail sales

You don"t often see solid data beats go stale quite so fast as the Australian retails sales did today

:-D

AUD up on the beat for retail trade and capex data that was not too bad ... and then 15 minutes later it shot lower on China private manufacturing PMI data.

AUD/USD update:

Anyway, Westpac (in brief) on the retail data, FWIW now ....

• Better than expected


• Stronger post-Cyclone rebound in Queensland and some solid gains across other states.


• Total retail sales - the strongest monthly result since September 2014


• Note that some of the rebound reflects higher prices with fresh fruit and vegetable prices in particular rising due to Cyclone disruptions to supply


• There were strong gains in other sub-groups as well though ... & more subdued across other sub-groups


• Overall the result is considerably better than feared, confirming temporary impacts from weather events were a factor in March and suggesting underlying conditions have improved somewhat. The main caveat is around food prices which may account for the bulk of the gain in this large sub-component (basic food accounts for 40% of total retail sales).
  

Analyst responses to Australian data coming in - retail sales
Analyst responses to Australian data coming in - retail sales
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Australian Dollar Sinks After China Caixin PMI Contraction

Talking Points:

• Australian Dollar declined on a 49.6 Caixin manufacturing PMI reading


• The figure was the first contraction since June 2016, almost 1 year ago


• This disappointment followed yesterday’s improvement in official data

What do retail traders’ buy/sell decisions hint about the Australian Dollar trend?Find out here.

The Australian Dollar declined versus its major peers after the Caixin manufacturing PMI reading was released. A reading above 50 indicates growth while a measurement below 50 shows contraction.

The markets were expecting another improvement in China’s private manufacturing sector, just like what happened in yesterday’s official version. What they got was quite the opposite. The PMI survey clocked in at 49.6 versus 50.1 estimated, indicating a contraction. This was the first such print since June 2016, just about one year ago.

Since China is Australia’s largest trading partner, economic news-flow from the former country often implies knock-on effects on the latter, triggering a response from the currency.

Interestingly, the Caixin survey crossed the wires 15 minutes after a better than expected Australian retail sales data. That sent the Australian Dollar higher. Once the PMI disappointment flashed on traders’ screens, the Aussie erased this short-lived up move.

Australian Dollar Sinks After China Caixin PMI Contraction
Australian Dollar Sinks After China Caixin PMI Contraction
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It looks the Australian Treasurer has hinted at a poor GDP result next week

Leak is too strong a word, but hinted might work. Check out Australian Treasurer Scott Morrison speaking at The Committee for Economic Development of Australia summit in Canberra

Morrison said:

• Australia"s overall growth trajectory remains positive, but "that is not to say that there are no risks to this growth story"

And pointed to "lumpiness" in previous quarters, including a negative figure for the September 2016 quarter. The Australian Financial Review has more on what prove to be Morrisson pre-empting a very poor GDP result

Q1 GDP is due next week, Wednesday June 7

No Janet, its not going to be that big (GDP that is)

It looks the Australian Treasurer has hinted at a poor GDP result next week
It looks the Australian Treasurer has hinted at a poor GDP result next week
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Australian Dollar Lifted By Consensus-Smashing Retail Sales

Talking Points

• The Australian Dollar got a lift as official retail sales figures smashed forecasts


• Capital expenditure data missed, but nobody seemed too worried about that


• A manufacturing index released earlier found that sector still in rude health

So, it’s your favorite currency. Who agrees? Check out our sentiment page for an idea of the company you’re in.

The Australian Dollar spiked up sharply Thursday on news of a sold beat for official retail sales figures.

April sales rose a perky 1% on the month, far better than the 0.3% gain expected and more than strong enough to banish memories of the previous month’s 0.1% fall. Australian Dollar bulls liked this a lot, understandably, and sent AUD/USD up in the aftermath:

And the retail figures enabled investors to gloss over simultaneously-released news that capital expenditure had missed forecasts. Its 0.3% first-quarter gain was below the 0.5% expected, although the previous quarter’s fall was revised to 1%, from an initially reported 2.1%.

Earlier Thursday the Performance of Manufacturing Index from the Australian Industry group registered May as an eighth straight month of expansion, albeit at a slower pace.

This measure is analogous to the Purchasing Managers Indexes released globally in that any reading above 50 signifies expansion. May’s came in at 54.8, below April’s 59.2. The AIG reported that all seven sub-indexes which contribute to that headline had risen, but not as fast as in the previous month. That said, new-order levels remained high suggesting that the current growth period retains traction.

Still, there may not be much in any of this data deluge of this for Australian monetary-policy watchers. The Official Cash Rate remains at its 1.50% record lows and, while investors think it may go no lower, no rises are baked into futures markets for at least 18 months down the track. Like many Asia/Pacific central banks, the Reserve Bank of Australia is at least as wary of elevated global uncertainty as it is confident in its home economy’s domestic profile.

Get live coverage of major Asia/Pacific market movers at the DailyFX webinars

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter:@DavidCottleFX

Australian Dollar Lifted By Consensus-Smashing Retail Sales
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AUD/USD hitting new session lows. Poor China PMI>capex, retail sales

What a huge data dump in the past half hour or so:

• Australia Q1 Capex, "headline" is 0.3% (vs. expected +0.5%)


• Australia - April retail sales: 1.0% m/m (expected +0.3%)


• China Caixin manufacturing PMI: 49.6 (expected 50.1)

And mixed in there too was John Williams of the San Fran Federal Reserve ... part of what he said was:

• three rate increases for this year his base line view, four hikes possible if US economy strengthens

Four rate hikes this year! ... Rubbish (IMO) ... but there you go!

Anyway, the capex data was OK, and the retail sales was a solid beat indeed

BUT

China PMI is very poor - this is the private survey

I was surprised by the official China PMI yesterday, and a wee bit suspicious too ... and sure enough the resilience in those two has not been confirmed by the Caixin / Markit data just a few minutes ago

AUD/USD .... sliding away:

 

AUD/USD hitting new session lows. Poor China PMI>capex, retail sales
AUD/USD hitting new session lows. Poor China PMI>capex, retail sales
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China Caixin manufacturing PMI: 49.6 (expected 50.1)

ArticleBody

more to come

China Caixin manufacturing PMI: 49.6 (expected 50.1)
China Caixin manufacturing PMI: 49.6 (expected 50.1)
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Australia Q1 Capex, 'headline' is 0.3% (vs. expected +0.5%)

Australia Private New Capital Expenditure and Expected Expenditure, for the March quarter of 2017

I"ll post these 2 first, then more detail ...  

1. Headline: %

• expected +0.5%


• previous was -2.1%

2. The 2nd estimate for 2017/18 investment expectations $ bn

• Compared to the first estimate of 2017/18 capex plans of 80.6bn


• there is no median consensus estimate for this
  

more to come

Australia Q1 Capex, "headline" is 0.3% (vs. expected +0.5%)
Australia Q1 Capex, "headline" is 0.3% (vs. expected +0.5%)
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