Australia Macro+ Week Ahead: Retail Flows - Profit and Loss

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Australia Macro+ Week Ahead: Retail Flows - Profit and Loss

25 June Change May 30.0k 30.0k -18.6k

retail flows into FY27 (more below). AUAU UnemploymentParticipation RateRate MayMay 66.7%4.4% 66.7%4.4% 66.7%4.5%

AU Household Spending May 0.2%M, 4.0%Y 0.5%M, 4.3%Y -1.1%M, 4.9%Y

Macro Catalysts – CPI (May), Labour Force (May), Household Spending (May): US PCE Deflator May -- 0.4%M, 4.1%Y 0.4%M, 3.8%Y

US Core PCE Deflator May -- 0.3%M, 3.4%Y 0.2%M, 3.3%Y

We expect headline CPI to rise 4.6%Y in May, an increase from the prior month. US GDP 1Q -- 1.7%Q 1.6%Q

Friday 26 June

Importantly, we also expect a further tick up in core inflation, rising from 3.4% to

3.5%. For the May labour force data, we expect some giveback, with employment Source:releasesBloomberg,are dated basedMorganon StanleyAustralianResearchtime zone.estimates. International

rising 30k following a ~19k decline the prior month. With participation flat at 66.7%,

the unemployment rate should edge down to 4.4%. Separately, we expect

household spending will have increased 0.2%M, 4.0%Y in May, with the monthly

gain mainly reflecting partial payback from April’s weakness which was

concentrated in volatile categories.

Last Week – RBA June Meeting: The RBA Board kept the cash rate on hold at

4.35% at its June meeting in a unanimous decision, after hiking rates at the prior

three meetings. The Statement noted that financial conditions had tightened as a

result of the rate hikes earlier in the year, and that the Board felt it had space to

assess what impact these hikes, and ongoing constraints to oil supply, would have

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