CPI And Retail Sales Highlights Of Big Data Week

The focus of the week is likely to be Tuesday’s retail sales and Wednesday’s CPI data for November, especially given the larger-than-expected drop in October inflation.

• November CPI prints on Wednesday and is expected to come in at 4.5%y/y. It fell to 4.9% in October from 5.6% but the services component wasn’t updated, which has proven sticky. In addition, the December Judo Bank PMI showed that optimism regarding the outlook over the year ahead resulted in a pickup in services selling price inflation.
• Tuesday sees November retail sales released and it is expected to rise 1.2% m/m. The CBA’s household spending insights for November rose a very strong 1.8% m/m reflecting discounting for cyber week. Thus retail sales data over the coming months are likely to be volatile given changes in the timing of festive spending.
• Building approvals are also out on Tuesday and are expected to follow October’s robust rise with a modest -2.0% pullback. Housing finance for November is on Friday and projected to rise 1.2% after strong monthly increases across both investors and owner-occupiers.
• Q4 job vacancies print on Wednesday and while they have been moderating from recent highs they remain above pre-Covid levels reflecting the tight labour market.
• Thursday sees November merchandise trade data and the trade surplus is forecast to print at A$7500mn.