Apple Drives Australian Retail Sales, Trade Balance Worsens, and Reserve Bank Stays Steady

(This is an excerpt from an article I originally published on Seeking Alpha on November 4, 2014. Click here to read the entire piece.)

Tuesday morning in Australia was a busy time for economic news.

First, the Australian Bureau of Statistics reported that the release of the Apple (AAPL) iPhone 6 helped drive electrical and electronic goods retailing to a record 9.2% growth. {snip}


Australian retail sales (
Australian retail sales (“turnover”) look ready for another ramp to end the year

Source: Australian Bureau of Statistics

On the flip side, the Australian Bureau of Statistics reported that Australia’s balance of goods and services fell further in September…{snip}


Australia's balance of goods and services continues to plunge
Australia’s balance of goods and services continues to plunge

Source: Australian Bureau of Statistics

This whipsaw in good and then bad news was reflected in the intraday reaction of the Australian dollar (FXA). {snip}


The Australian dollar rocks up and down and up again on important economic news
The Australian dollar rocks up and down and up again on important economic news

Source: FreeStockCharts.com

The RBA said nothing new in issuing its November policy statement. {snip}

With the market’s expectation for a rate cut in the next month increasing only slightly, I am expecting the Australian dollar to continue to hold its bottom for 2014 to close out the year, all else being equal. The ever strengthening U.S. dollar is of course a key wildcard. Relatively benign trading in the Australian dollar should also be supportive of other risk trades in financial markets.


Expectations for a rate cut jump but the odds remain relatively low
Expectations for a rate cut jump but the odds remain relatively low

Source: The Australian stock exchanges’s RBA Rate Indicator – December 2014
The 2014 low continues to hold for the Australian dollar versus the U.S. dollar
The 2014 low continues to hold for the Australian dollar versus the U.S. dollar

Be careful out there!

(This is an excerpt from an article I originally published on Seeking Alpha on November 4, 2014. Click here to read the entire piece.)

Full disclosure: net long the Australian dollar

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.