Growth figures of domestic retail sales have been declining since 2014 and growth figures hit a low-point in September 2017. Annual growth rates then began increasing for about a year, only to stabilise at around 3.0% to 3.5% through late 2018. Early 2019 produced a string of low-growth months along with the odd surprisingly strong result. The latest figures offer some promise but they may be just an aberration.
According to the latest ABS figures, total retail sales increased by 0.4% in June on a seasonally-adjusted basis, more than the +0.3% increase expected and an improvement on May’s +0.1% increase. On an annual basis, retail sales increased by 2.5%, up a touch from May’s comparable figure of 2.4%.
Westpac senior economist Matthew Hassan said, “Overall, while the June report does not show a further worsening it underscores the very weak conditions across Australia’s retail sector over the last year. The key question going forward is the extent to which policy stimulus flows through to spending in the second half of the year.”
Local bond yields plunged in line with US markets, largely ignoring local data. By the end of the day, the yield on 3-year ACGBs had shed 9bps to 0.72%, 10-year yields had fallen by 13bps to 1.09% and 20-year yields had lost 12bps to 1.55%.