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Australian Retail Sales disappoint.

Written by Sam Coxhead on May 30th, 2012.      0 comments

1:57 PM (NZT) The just released Australian Retail Sales numbers show a -.2% fall in activity on the month against an expected rise of +.2%. Household goods purchases led the fall in activity and interestingly from a geographic perspective, the softness was led by Victoria and Western Australia. Modest gains were seen in NSW and Queensland. Is this a sign that the softening commodity price picture is starting to impact on spending?
The interest rate market is looking for a further cut of 25pts from a 3.75% cash to 3.5% at next week’s RBA meeting. There is potential that the market has moved ahead of itself with inflation and GDP numbers due soon. But if the RBA maintains an unchanged cash rate and the Euro-zone banking sector continues to spiral out of control, they would be left behind and be forced to cut more aggressively. And this typifies the current uncertainty in the financial markets.
At this stage other central banks look to be keeping their powder dry for a further escalation of issues. In Europe, further chatter is emerging over Europe wide bank funding vehicles. This comes after the ECB rejected a Spanish Government solution to funding issues for  the giant Bankia overnight.
The retail sales number sent the AUD lower across the board, and dragged the NZD with it to a lesser extent, but it has recovered from it lows at this time.
Tomorrow sees the release on NBNZ Business Confidence numbers in NZ, and building and capital expenditure numbers in Australia.
          Past 24 hours
  Current level Pre-AU Retail S  % Chge since AU RS   Low High
NZD/USD 0.7598 0.7605 -0.09%   0.7583 0.7650
AUD/USD 0.9791 0.9810 -0.19%   0.9780 0.9899
NZD/AUD 0.7760 0.7750 0.13%   0.7707 0.7751
AUD/NZD 1.2887 1.2903 -0.13%   1.2902 1.2975
NZD/GBP 0.4865 0.4868 -0.06%   0.4837 0.4881
NZD/EUR 0.6095 0.6099 -0.07%   0.6052 0.6092
NZD/YEN 60.43 60.46 -0.05%   60.20 60.79
NZD/CAD 0.7785 0.7785 0.00%   0.7768 0.7812
Topics: Australian Retail Sales