Australian Retail Sales beat Estimates

The AUD/USD Forex market had a short lived spike higher following upbeat Australian retail sales data crossed the wires. The Australian dollar then sold off, 15 minutes later, after weaker than expected Chinese PMI data.

Australian retail sales, for April, rose a solid one percent for the month. This was well above the 0.3 percent gain expected. The retail sales print was also strong enough to erase memories of the previous month’s 0.1% contraction. Aussie Dollar bulls were very happy with this result as the Aussie spike higher.

The strong retail sales quickly erased the impact of miss with capital expenditures. This came in at a 0.3 percent first quarter gain. This was below the 0.5 percent that was expected. The previous quarter’s fall was revised to 1 percent, from and first report of 2.1 percent.

Investors get a deluge of Australian Economic Data

Earlier in the trading session, the Performance of Manufacturing Index (PMI) from the Australian Industry group (AIG), for the month of May, showed its eighth straight month of expansion. However at a slower pace.

May’s print was at 54.8. This was well below April’s 59.2. The AIG, in its report, said that all seven sub-indexes had risen. However the pace of expansion had slowed. New orders remained high. This suggests that that the current growth period is retaining traction.

All this data might not mean much to the monetary policy of the Reserve Bank of Australia (RBA). The Official Cash Rate is at a 1.50 percent record lows. Investors do not think it will go lower, however, they also do not think that there are any rate hikes for at least 18 months.