When are the Australian Retail Sales/Trade Balance and how could they affect AUD/USD?
Overview
Early Thursday morning in Asia at 00:30 GMT markets will see Australia’s October month Retail Sales and Trade Balance numbers. While these numbers were previously considered second-tier, the latest disappointment from Aussie data and mixed clues from the Reserve Bank of Australia (RBA) make every figure important for AUD/USD traders.
Market expectations favor a soft reading of Trade Balance, to 6,100M from 7,180M prior, versus likely improvement in Retail Sales growth to 0.3% against 0.2% earlier. Details suggest that Imports and Exports reported 3% growth each during the previous month.
Ahead of the reading, Westpac says,
The Oct retail sales survey is the first official reading on the consumer for Q4. Westpac looks for a sluggish 0.3%mth (nominal) rise in sales, in line with consensus. There remains some hope that the tax offsets will belatedly come through. Australia is on track for its 22nd consecutive monthly trade surplus in Oct. Westpac looks for the surplus to slip from A$7.2bn to $6.3bn, with exports -2.8%mth, led by lower iron ore prices and volumes and a retracement in gold exports. Imports should ease back a little too (-0.8%), partially correcting a 2.5% jump in Sep. Markets will focus most on retail sales but consistently large trade surpluses should not be forgotten as a source of support for A$.
How could they affect AUD/USD?
The recently mixed Gross Domestic Product (GDP), down on QoQ and up on YoY, increases the uncertainty triggered through the RBA’s refrain from providing any strong clues to future monetary policy actions. Further, the on and off concerning the odds of the phase-one trade deal between the United States (US) and China also keep Aussie traders on their toes. With this, both the scheduled data are of importance to provide a notable move of AUD/USD. While upbeat readings can dim prospects of RBA’s excessive monetary policy easing in 2020, the otherwise case could weigh on the pair amid looming US-China tussle.
Technically, 0.6920/30 area including 200-day Exponential Moving Average (EMA) and October high becomes the key upside resistance area while pair’s declines below 100-day EMA level, near 0.6840 now, could recall 0.6800 on the charts.
Key notes
AUD/USD consolidates recent gains to 0.6850, eyes on Aussie trade balance, retail sales
AUD/USD Forecast: Bulls losing interest after dismal GDP figures
About Australian Retail Sales
The Retail Sales released by the Australian Bureau of Statistics is a survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes and it''s considered as an indicator of the pace of the Australian economy. It shows the performance of the retail sector over the short and mid-term. Positive economic growth anticipates bullish trends for the AUD, while a low reading is seen as negative or bearish.
About Australian Trade Balance
The trade balance released by the Australian Bureau of Statistics is the difference in the value of its imports and exports of Australian goods. Export data can give an important reflection of Australian growth, while imports provide an indication of domestic demand. Trade Balance gives an early indication of the net export performance. If a steady demand in exchange for Australian exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.