Growth figures for domestic retail sales have been declining since 2014 and they 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 and early-2019. The last few months’ reports have provided some encouraging figures but they are far from a state which could be accurately described as buoyant, strong or robust.
According to the latest ABS figures, total retail sales increased by 0.3% in March on a seasonally-adjusted basis, generally in line with market expectations although a clear drop from February’s revised increase of +0.9%. On an annual basis, retail sales increased by 3.5%, up from February’s comparable figure of 3.2%.
Financial markets responded by sending local bond yields higher although a good amount, if not all of the reaction, arose from the RBA’s decision in the afternoon to not reduce the cash rate as many economists had expected. By the end of the day, the yield on 3-year ACGBs had jumped 8bps to 1.31%, 10-year yields had gained 5bps to 1.80% and 20-year yields were 4bps higher at 2.22%.