Daily Commentary BY THE CURVE TEAM –

Retail Dip

25th of January, 2021

December retail sales levelled out but remain a strong point for the economy.

Sales were down 4.2% over December. Leading the falls were NSW and Victoria.

Victorian sales fell 7% following a 22% rise in November. This is likely a regression back to more sustainable levels.

NSW was down 5%. Strict lockdown measures in the northern beaches over Christmas was the predominant factor driving sales down.

Sales remain 9.4% higher than last year so will likely continue to be a strong point for the economy. Risks from covid-19 and JobKeeper being wound back from June remain though.

This week’s data releases is headlined by CPI data for Q4 out on Wednesday. Although employment has taken on new significance for the RBA, inflation is still a major influence on the RBA’s actions.

This is especially relevant as over the next few months the RBA will decide whether to extend their QE programme or end it. Also released this week is the NAB Business survey for December released on Wednesday and credit data for December released on Friday.

Josh Stewart

Associate - Money Markets