Due at 0130GMT we have the April trade balance and also retail sales data due from Australia.

Trade balance,

  • expected is -2.1bn, prior was -1.322bn
  • Another big deficit is expected this month, declining commodity prices are weighing in export values, while merchandise imports are up despite the lower AUD

Retail Sales,

  • expected is +0.3% m/m, prior was +0.3%
  • Most focus will be on retail sales (unless the trade balance data is a big surprise)
  • The previous month's retail sales result was lower than expected. You'll recall the RBA cut rates in the first week of February, which was expected to give a bigger boost to retail sales, so the miss was a concern.
  • For April (the subject of today's release), consumer sentiment surveys were very poor at this time (in the lead up to the Budget) and this will likely weigh on the data release today. Petrol prices were edging higher, which will have cut into discretionary spending.
  • Yesterday the National Australia Bank published their latest online retail sales index, which came in at (seasonally adjusted) +1.5% m/m. The trend estimate was unchanged relative to March and February at +0.6%. Online retail sales index total sales rose by 9.6% y/y. I wouldn't read too much into these figures as guiding us for today's Australian Bureau of Statistics data, but they do hint at a slightly better result than consensus expects.

For the AUD today, any positives from the data (especially retails sales, THAT is the focus) will be supportive. There is good selling and resistance above 0.7810, bids around 0.7750, but note stops are building below there. Buying again 0.700/10.

A negative surprise will hit the AUD, with stops below 0.7750 in danger.