Aussie data dump: Retail Sales, ( 0% vs 0.3% exp ) Trade Balance, ( 450M vs 6100M exp ) sends AUD/USD -0.18%

• AUD's marathon of data for the week has continued today with the release of the October Retail Sales and Trade Balance.
• Note: Retail Sales was the main focus in these releases.
• AUD has dropped around 20 pips on the knee-jerk and still counting. 

The data arrived as follows

• Imports (Oct)   0% vs prior 3%.
• Exports (Oct)   -5% vs prior 3%.
• Trade Balance (Oct)   4502 M vs 6100 M expected and prior 7180 M
• Retail Sales s.a. (MoM) (Oct)   0% vs 0.3% expected and prior 0.2% 

AUD/USD has dumped 0.17% and counting for the session on the knee-jerk on the back of the combined disappointments in the data.

Descriptions

• 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.
• 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. Review Alex Nekritin's Article - Trading the Aussie with Australia Trade Balance

Australian October 19 Trade Balance – Full Report

In trend terms, the balance on goods and services was a surplus of $6,341m in October 2019, a decrease of $229m on the surplus in September 2019. In seasonally adjusted terms, the balance on goods and services was a surplus of $4,502m in October 2019, a decrease of $2,345m on the surplus in September 2019.

In seasonally adjusted terms, goods and services credits fell $2,205m (5%) to $40,750m. Non-rural goods fell $1,710m (6%) and non-monetary gold fell $666m (25%). Rural goods rose $114m (3%) and net exports of goods under merchanting rose $14m (93%). Services credits rose $45m (1%).

Australian October 19 Retail Sales – Full Report

Australian retail turnover was relatively unchanged (0.0 per cent) in October 2019, seasonally adjusted, according to the latest Australian Bureau of Statistics (ABS) Retail Trade figures. This follows a rise of 0.2 per cent in September 2019.

"There were falls for clothing, footwear and personal accessory retailing (-0.8 per cent), department stores (-0.8 per cent) and household goods (-0.2 per cent)," said Ben James, Director of Quarterly Economy Wide Surveys.

Analysts comments

Analysts at Westpac, ahead of the data, explained that in yesterday’s national accounts:

"The ABS noted that the “reduction to tax payable did not translate to a rise in discretionary spending, which led to a visible impact to household saving.” Indeed household consumption spending rose just 0.1%qtr, with spending on discretionary goods and services falling -0.3%. The Oct retail sales survey is the first official reading on the consumer for Q4."

As for the trade balance, the analysts at Westpac said that Australia was on track for its 22nd consecutive monthly trade surplus in Oct. "Markets will focus most on retail sales but consistently large trade surpluses should not be forgotten as a source of support for A$."

AUD levels to watch 

• Support levels: 0.6800 0.6770  0.6730  
• Resistance levels: 0.6865 0.6890 0.6920

While the data has weighed on AUS/USD, prior to the data, Valeria Bednarik, the Chief analyst at FXStret argued that "the pair, however, would only turn bearish on a break below the 0.6800 figure." Trade deal optimism, as well as the prior session's positive data events from China, as well as a relatively inline Gross domestic print from Australia, have likely taken some of the blow out of today's poor domestic data. 

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