Domestic Banks' July Australian Retail Sales Previews

Below is a summary of the domestic Australian banks in terms of their views ahead of the upcoming retail sales data print for July. The data is out in a little under 1 hour. The broad consensus is for a +0.3% rise, versus +0.2% in June.

• ANZ:+0.4% forecast. We expect modest growth in retail in July, with the risk of a slowdown in August and beyond. ANZ-observed spending shows a loss of momentum for daily average spending in August retail, which is only partly explained by a shift to travel and other services. Resilient household balance sheets and the strong labour market may dilute the impacts of rate hikes on spending in the near term, but consumer spending growth will slow as rates tighten.
• CBA:+0.5% forecast. Our internal data suggests that nominal retail trade rose in July. Spending remains elevated but rising interest rates and high inflation are increasing cost of living pressure and this should translate to less consumption, especially in discretionary sectors. Critically, the lag between when the RBA announces an interest rate rise and minimum repayments increasing means that many mortgage holders are yet to have felt the full extent of the hikes so far.
• NAB: +0.3% forecast. Retail Sales (Monday) are expected to show still positive nominal growth in the month as consumer spending slows, but remains resilient in the face of mounting headwinds. We pencil in growth of 0.3% m/m to follow the 0.2% m/m in June.
• Westpac:-0.1% forecast. July looks to have been another lacklustre month for retailers. While the continued reopening rebound, and the associated return to more normal spending and saving patterns, is driving gains in wider spending, this is also seeing a shift in the spending mix away from retail towards non-retail segments such as tourism and travel. Meanwhile, retail may also be seeing more impact from rising costs, interest rate hikes and the slump in consumer confidence. On balance, we expect nominal sales to dip 0.1% in the July month.