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FX & Equities: Disappointing Retail Sales to Pressure BOJ

Posted by Akhilesh Ganti on Jul 28, 2014 11:00:00 PM

Japan's Retail Sales for June declined by -0.6% YoY, much lower than the -0.4% forecast, as April's sales tax hike continues to discourage consumer spending. This anemic figure has to be disconcerting to PM Abe who had pinned his hopes on the consumer to offset the stagnating export sector's drag on the economy. Should this trend continue then pressure will surely intensify on the BOJ to ratchet up stimulus as they attempt to avoid the prospect of the economy reverting back to its 'pre-Abenomic' moribund state.

Australia's New Home Sales for June came out at +1.20%, higher than the -4.30% that analysts were expecting. This is another data point that supports the RBA's decision to adopt a neutral monetary policy stance as they wait for the economy to find its footing.      

Ranges:{WWM's New ALPHA Trader - DAILY charts [EUR, GBP, AUD, YEN, GOLD, OIL, DXY]}(click to enlarge)

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Economic Data - {Source: Bloomberg}

Country Event Period Survey Actual Prior
Japan Jobless Rate Jun 3.50% 3.70% 3.50%
Japan Job-To-Applicant Ratio Jun 1.09 1.1 1.09
Japan Overall Household Spending YoY Jun -4.00% -3.00% -8.00%
Australia ANZ Weekly Consumer Confidence Index 27-Jul -- 116.2 113.5
Japan Retail Trade YoY Jun -0.50% -0.60% -0.40%
Japan Retail Sales MoM Jun 0.80% 0.40% 4.60%
Japan Large Retailers' Sales Jun -1.70% -1.80% -1.20%
Australia HIA New Home Sales MoM Jun -- 1.20% -4.30%

Equities:{WWM's New ALPHA Trader - DAILY charts [Dow30, SP500, Nasdaq100, Nikkei225, China, HKG40, Nifty50, ASX200]}(click to enlarge)

STOCKS 072914


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