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Australia September Retail Sales Beat Expectations



Australia retail sales
  • Australia September Retail Sales Beat Expectations

Australian retail sales rose by 0.6 percent in September from August 0.5 percent, the Australian Bureau of Statistics said Friday.

That was higher than the 0.4 percent rise expected by economists.

Sales for the third quarter fell 0.1%, the ABS said.

The ABS revised August retail sales growth higher to 0.5 percent from 0.4 percent previously reported.

The ABS said that sales rose in household goods (2.3%), cafes, restaurants and takeaway food services (1.0%), food (0.2%) and department stores (0.5%), offsetting declines in clothing, footwear and personal accessories (-0.6%) and other retailing (-0.1%).

There was also pleasing news on the performance of sales across the country with every state and territory registering an increase on the levels seen in August.

Sales rose in New South Wales (0.8%), Victoria (0.6%), Queensland (0.5%), Western Australia (0.5%), South Australia (0.3%), the Northern Territory (1.2%), Tasmania (0.4%) and the Australian Capital Territory (0.3%), said the ABS.

But it wasn’t all good news.

Alongside the monthly report, the ABS also released quarterly sales volumes — something that feeds directly into household consumption in Australia’s Q3 GDP — and, as opposed to the monthly report, it was big disappointment.

Volumes fell by 0.1 percent to $73.88 billion for the quarter, well short of forecasts for an increase of 0.4 percent. It was the first quarter since Q2 2014 that sales volumes — adjusted for price movements — declined.

Given nominal sales increased as volumes fell, it indicates that prices rose over the quarter, as seen in Australia’s Q3 CPI report released in late October.

The ABS said that the main contributors to the fall were in food and department stores sales which slide by 0.7 percent and 1.1 percent respectively.

The increase in the June quarter, originally reported as a gain of 0.4 percent, was also revised down to 0.3 percent.

Retail sales account for around 30 percent of total household consumption, the single-largest component within Australian GDP.

Not good sign for September quarter GDP report, at least on early indications.

Despite the miss on the quarterly sales volumes, the market reaction, so far at least, has been muted.

The Australian dollar is trading at .7682, flat for the session, having attempted to bust through the .7700 in the immediate aftermath of the report.

This reaction may also have been caused by the release of the RBA’s quarterly statement on monetary policy which arrived at the same time as the retail sales report.

The ASX 200 is down 0.7 percent, maintaining the losses seen earlier in the session.

Australian 3 and 10-year bond are trading softer, down 4 and 3.5 points ticks respectively.

February 2017 cash rate futures put the odds of a 25 basis point rate cut from the RBA at 27 percent, unchanged for the session.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend




Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.


  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return



Crude oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather




Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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