It's a big week for Australia, with the RBA policy decision and building approvals out of the way and plenty more to come
- Due at 0130GMT Thursday - retail sales and trade balance
- Due at 0130GMT Friday - the Reserve Bank of Australia Statement on Monetary policy
Retail Sales for June,
- expected is +0.2% m/m, prior was +0.6%
From National Australia Bank:
- Retail Sales is the most sensitive of the data prints for the week. For the June month, NAB's forecast (partly based on NAB's new Cashless Retail Sales Index for June) is for flat sales while competitive conditions still evident in the NAB Business Survey through to May.
- While there is some downside risk to this estimate - together with damped sales prospects in the near term from the already in place rises in power prices - we are also mindful the Department Store Sales dipped in May and often sees payback the next month within still difficult conditions.
Trade balance for June,
- expected is +AUD1800m, prior was +AUD2471m
NAB again:
- expected to reveal a somewhat leaner surplus of $1500m, down from the $2471m surplus
- A 5.2% fall in the RBA Commodity Price Index in June (an index fashioned on estimates of prices received) is likely to have weighed on export receipts, while port loadings data and industry reports point to a crimping of iron ore volumes.
- There is however a wild card to consider as far as recorded imports is concerned. We wrote a month ago of the import of the Ichthys LNG project $2.7bn Central Processing Facility that could have shown up in May imports (or possibly June). Moreover, the massive Prelude floating LNG platform left Korea in late June, since arriving offshore to the north east of Broome, and is of much value. Any "sticker shock" from a surprise large deficit, might see some initial market reaction, only to be reversed on closer inspection.
- Such imports would also bolster measured business investment for the June quarter with no impact on GDP until production and export of LNG commences.
