Wall Street's new highs; Australian Retail Sales the focus locally

US stocks have notched-up another record high, as the S&P500 closes in on the 3000-mark.

Source: Bloomberg

Another record-reaching session

US stocks have notched-up another record high, as the S&P 500 closes in on the 3000-mark. The ASX 200 yesterday came close to its own psychological milestone, nearing the 6700-level. The highs came on a light-day’s trade on Wall Street, however, with US markets trading-in a shorted session in ahead of the Independence Day holiday. Currency markets were more volatile, with commodity currencies climbing courtesy of several positive trade balance data out of New Zealand, Canada and Australia. And the USD dipped, following the release of soft ADP employment data, and a Tweet from US President Trump accusing Europe and China of currency manipulation.

Signs of slowing growth

Having passed the weekend’s G20 meeting, market participants seem to be looking at the global economic outlook with clearer-eyes. Calmly and sensibly – risk assets are still climbing and the VIX is trading lower – traders are pricing in a lower growth and inflation world, seemingly as much due to cyclical factors, as it is to the trade-war. In commodity markets: oil prices are shifting lower, as are industrial metals. And in fixed income: the yield on benchmark US 10-Year Treasuries hit a new multi-year low yesterday of 1.96%; while US 5-Year Breakevens are suggesting an implied rate of inflation around 1.50%.

Building Approvals and Trade Balance data beats

The Australian economic data released yesterday belied these concerns. Australian Building Approvals figures, along with Trade Balance numbers were printed, and beat expectations. Building approvals expanded 0.7%, against a forecast of 0.0%; and the trade plus expanded to $5.75b, supported by a healthy lift in both imports and exports last month. The market reaction to the positive news was limited, however. The ASX lifted slightly, led by a boost in the industrials and REITS. But the AUD barely budged, with markets seemingly forming the judgement that the data does little shift neither the nation’s economic fundamentals, nor the RBA’s likely interest rate outlook.

Retail Sales highlights today’s calendar

Local Retail Sales data headlines today’s data docket, and it’s a print that takes on slightly greater significance given the outcome of Tuesday’s RBA meeting. The Reserve Bank made special mention of consumption being a potential drag on the Australian economy, and the “main domestic uncertainty”, as softening property prices and lower wages growth stifle spending. The data today isn’t expected to be spectacular, but its forecast to be a better month-on-month print to that which came last month: economists consensus estimates are for 0.2% growth, up from a -0.1% contraction.

What today’s Retail Sales data means

The RBA, according to the press-release accompanying its decision on Tuesday, expects a “pick-up in growth of household disposal income” to improve retail spending over-time. It’s an allusion to the fact lower debt repayments for households, in light of recent interest rate cuts, ought to free up consumers’ capacity to spend in the future. Today’s data pertains to the month of May, so it will probably not reflect the (assumed) lift in consumer activity that should accompany rate-cuts. Nevertheless, it will provide a base-line for how the RBA’s recent actions impact future retail sales data, as lower-rates flow through the economy.

The broader challenges to consumption growth

The real question, in the bigger picture, is what propensity do Australian consumers have to spend? Indeed, disposal income, on the aggregate, ought to increase because of recent rate cuts. But we remain in a low-wage growth environment – something that an only an unemployment-rate around 4.5%, according to the RBA, will remedy; and property prices, through stabilizing recently, are still looking sluggish. Furthermore, household debt remains very high, and recent GDP data has showed Australians are displaying a tendency to defer spending, and use extra income to pay this down. Given this dynamic, it may not be a surprise consumer confidence remains flat.

Retail Sales data’s market implications

For market participants, the health of consumer discretionary sector, as well as, of course, the AUD, remain in focus in light of the recent spate of soft Retail Sales data. Regarding the former, that sector is demonstrating signs of general price consolidation, as the benefits of lower interest rates become fully-discounted, and weak domestic consumptions weighs on earnings growth. The AUD will be more sensitive in the short-term to any consumption figures: the market is divided about whether a rate cut ought to occur before December. Poor Retail Sales data will bring forward expectations of another cut, which would weigh further on the AUD.


Denne informasjonen har blitt forberedt av IG Europe GmbH og IG Markets Ltd (begge IG). I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser, så derfor er denne informasjonen ansett å være markedsføringsmateriale. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder. Se fullstendig disclaimer og kvartalsvis oppsummering.

Realtidskurser på våre mest populære markeder

  • Valuta
  • Aksjer
  • Indekser
Selg
Kjøp
Oppdatert
%-Endring
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Selg
Kjøp
Oppdatert
%-Endring
-
-
-
-
-
-
-
-
Selg
Kjøp
Oppdatert
%-Endring
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Kursene ovenfor er underlagt nettstedets vilkår og betingelser. Kursene er kun veiledende. Alle aksjekurser er forsinket med minst 15 minutter.

Kanskje du også er interessert i...

Beregne dine potensielle tradingkostnader med vår transparente avgiftstruktur.

Finn ut hvorfor så mange kunder velger oss og hva som gjør oss til en verdensledende leverandør innen CFDer.

Være forberedt på kommende markedsbegivenheter med vår økonomiske kalender.

CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring. 74 % av alle ikke-profesjonelle kunder taper penger på CFDer hos denne leverandøren. Du burde tenke etter om du forstår hvordan CFDer fungerer og om du har råd til den høye risikoen for å tape penger. Profesjonelle kunder kan tape mer enn sitt opprinnelige innskudd. Opsjoner er komplekse finansielle instrument og du risikerer kapitalen din. CFDer er komplekse instrumenter som innebærer stor risiko for raske tap på grunn av giring.