Daily Flows & Insights – Retail Sales Rebounds But Downward Trend May Continue 

Daily Flows

  • Domestic retail sales was released yesterday morning. The results were not jarring and did not prompt any large movements in the interest rate markets.
  • There has been significant flow from ADI’s into the securities and NCD space as liquidity has returned to the market.
  • CBA’s recent bond issuance continues to be traded heavily in the secondary market across both fixed and floating tranches.

Retail Sales Rebounds But Downward Trend May Continue

  • Retail Sales increased by 0.5% MoM in July, growing by market expectations of 0.3% and a strong reversal from the 0.8% decline last month.
  • This stronger than expected print may have been propped up by increased spending while the FIFA World Cup was on.
  • Although retail sales have not fallen off a cliff, in real terms household spending has been significantly down.
  • Private baking data also suggests that consumers are feeling the pinch and cutting back on spending.
  • With weak consumer confidence & fixed rate mortgages rolling off, some households will have to reduce budgets and spending for the remainder of 2023.
  • The data does not seem enough to warrant a change in stance on monetary policy either way.
  • The RBA will continue to monitor data as it comes in and react responsively if needed.
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Curve Team
Jack Pedersen