Australia Retail Sales Flat In September

Friday saw the release of several important data points including Australia’s retail sales data and US employment data. The employment data has been affected in the last two months by the hurricanes that hit the south-eastern US. The employment change for October was 261,000 which was a significant bounce from September’s 18,000 increase but was nevertheless below consensus expectations of 312,000. The unemployment rate actually dropped to 4.1% but this was mainly because the participation rate dropped by 0.4% to 62.7%. Overall the market reaction to the news was fairly muted although the gold price dropped by around $6 per ounce. The S&P 500 and Dow both climbed throughout the day and closed up 0.3% and 0.1% respectively.

Australia’s retail sales were flat for the month of September after a strong rise in August. This data point indicates that retail in Australia is still under pressure with the constant threat of Amazon looming over the sector. Many well-known retailers, such as Myer, are struggling at the moment and their share prices are reflecting this weakness.

Oil prices reached a multi-year high as optimism for an extension to the OPEC production cuts increases. Russia and Saudi Arabia seem in lock-step with their intention to work together to ensure the oil market continues to rebalance. Although inventories have been declining, there is still a way to go to get back to the five-year average.

ASX futures are pointing to a slightly higher open this morning following from gains last week that have brought the index within range of the 6,000 level. The index is now at a year-to-date high after a very strong October with momentum firmly in the upward direction.

Data Releases:

–    No significant Data

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This article was written by William O’Loughlin – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via william.oloughlin@rivkin.com.au or by phoning +612 8302 3633.