Aus macro/retail sales/vacancies

Retail sales

The chop continues, down under. That is a very difficult set of monthlies to parse. Variable, and lower than in the recent past, and a bit of give back from the unexpectedly strong Jan print. Taylor Swift provided a modest bump overall, which of course will not recurr.

YoY suggests margin pressures to a lot of retailers, whose sales are growing by less than labour, utilities etc.

We expect the consumer will remain pressured by higher mortgage rates. It’s just immigration (which is strong) keeping total sales alive for now.


Vacancies continues to trend lower, -6.1% over the past quarter. They are, in our view, at stark odds with a) some of the inflation data b) that most recent employment data print (the +116.5K jobs created last month).

We continue to think the RBA is absolutely done (i.e. at peak rates) and that the bias from here is towards cuts, which will be required. It would seem the prospect of those cuts has caused pockets of the market to run quite hard (AREITs comes to mind) and is helping to keep a lid on the 10yr (AGB’s).

It also compells us to run a modest underweight to the banks, where we see risks to those low BDD’s (bad and doubtful debts) which should move higher over time as unemployment leads to a lift in arrears.

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