Australia Retail Sales Rise 0.3% in March, Below Expectations

Australian retail sales rose by 0.3% in March, marking the third consecutive monthly increase but falling short of market expectations. Despite the monthly rise, retail sales volumes were flat in the first quarter, indicating that consumer spending contributed little to economic growth. The subdued figures were partly attributed to disruptions from a cyclone in Queensland, which led to shop closures and weaker activity in some sectors, although food spending rose. This soft consumer trend, combined with global economic concerns such as U.S. tariffs on China, has increased the likelihood of the Reserve Bank of Australia considering a rate cut at its May meeting. Market sentiment reflects full pricing of a possible quarter-point rate cut, and policymakers are less concerned about runaway consumer demand in the near term. The health of the Chinese economy, as Australia's largest trading partner, also remains a significant factor affecting both the retail outlook and the Australian dollar.