Bond markets have been supported by some market-friendly data and while Fed speakers were again mixed, it was the more dovish remarks that captured attention.
NAB Economics Data Insights – week ending 10 July 2021
Compared to the start of 2021, consumption is now down around 0.7%.
NAB Chief Economist, Alan Oster commented
- Yet again, the pandemic has thrown a spanner in the works for many retailers. Since late May we have seen lockdowns in Victoria, Sydney and surrounds, South-East Queensland, Townsville, Darwin, Alice Springs and Perth. Of these, only Sydney remains in lockdown, although much of the retail sector remains open. The Sydney lockdown has now been extended at least another two weeks.
- Overall consumption spending declined in the week ending 10 July, both nationally and in every state and territory. Unsurprisingly, New South Wales dropped sharply and has now declined to a similar level that Victoria experienced during its two-week lockdown in late May-early June. Victoria experienced a sharp recovery for two weeks following lockdown, but this has now partly unwound. Interestingly, short (3-5 day) lockdowns in Queensland, Western Australian and the Northern Territory finished in early July, but this has not (as yet), led to higher consumption spending.
- Compared to the start of 2021, consumption is now down around 0.7%. In 2019 (the last “normal” year), consumption was up 17.5% in the same week, compared to the start of that year. Retail results are even weaker – now down around 4.3% since the start of the year, while the same period in 2019 saw retail up 8.5%. While hospitality was also weak (off around 5% since the start of the year) and has been hit hard by a series of lockdowns, the seasonal pattern in 2019 showed a similar drop (-3.3% at the same time that year).
- Inward credits data slowed last week, following a sharp EOFY gain in the week prior. In index terms (annual reset) the overall index stood at 107.8 in the week ending 10 July, compared to 113.3 in the same week in 2019. Unsurprisingly, New South Wales is somewhat weaker than the same period in 2019. National data also shows that retail inflows have been generally weaker than their 2019 levels since early May this year.
For further details please see NAB Data Insights (week ending 10 July 2021)