First to come out with their retail sales report is New Zealand. As you may know, they’ve been struggling with sluggish domestic demand lately. In fact, the last couple of reports have failed to post growth in the retail trade scene, with the most recent report recording flat sales in August.
This time around, I can’t help but feel there’s potential for growth, though we’ve yet to receive consensus forecasts for September. After all, credit card spending increased by 4.1% year-on-year in September, up from the previous month’s 2.1% growth. In addition, studies show that retailers are feeling more positive lately. Could stronger sales be behind their newfound confidence?
Whatever the case may be, look for NZD/USD to react to any surprising results come 9:45 pm GMT on Sunday.
Word on the street is that the headline retail sales will show growth of 0.7%, extending the monthly growth streak to four months. This would also mark a slight improvement from the previous month’s figure, which showed that sales rose by 0.6% in September. Meanwhile, core retail sales – which doesn’t include car sales – is expected to maintain a growth rate of 0.4%.
I’m excited to see whether U.S. consumers have kept up their spending habits. Remember, the recent NFP report came in better than expected. We all know what more jobs means for the economy, right? Higher spending yo!
On the other hand, I am a little worried by the fact that a lot of unemployed people have stopped receiving their unemployment benefits. As I’ve mentioned in the past, a person is only eligible to collect benefits for 99 weeks. Once those 99 weeks are up, he can no longer collect paychecks from Uncle Sam. With a ton of people coming off the claims line in the past month, it’ll be interesting to see whether spending has kept pace.
In any case, I think that this report could set the tone for trading for the rest of the week. It is the first red flag coming out from the U.S. and is scheduled for release at 1:30 pm GMT on Monday. If data shows that retail sales picked up more than anticipated, it could set the stage for another bullish dollar run.
Lastly, on Thursday at 9:30 am GMT, we’ll see if the Brits returned to their shopaholic habits in October to help the economy. In September we saw that consumer spending continued to decline by 0.2% following the 0.7% fall in August.
Economic gurus are still busy looking into their crystal balls to release an official estimate. But there are a few out there who think we could be in for a pleasant surprise given the positive consumer spending data that we saw earlier this week.
Last Monday, the British Retail Sales Consortium’s (BRC) report showed that spending was up by 0.8% compared to October of last year. This was also higher than September’s 0.5% reading.
But don’t get too giddy just yet! You have to know that the BRC said that the rise was primarily due to inflation. Boo!
If we see a weak, not-at-all-sexy figure for October, we may just see the pound end up in the bear lair once again.
So there you have it folks – three retail sales reports, which means three opportunities for you to trade the news! Now if trading the news ain’t yo thang, then that’s alright! Just make sure to read up and see what effect these reports have on market sentiment.