Retail Trade Positive

Yesterday retail sales figures came out showing a 0.3% rise in April after a 2.2% rise in March. Retail sales are now 6.6% higher than a year ago - the largest annual increase since December 2007. Not bad for a recession!

The recovery in the housing sector is driving the spending with sales of furniture, carpets and tiles rising by 6.9%.

The performance of manufacturing index (PMI) rose by a record 7.4% in May, hitting a seven-month high. Also the equivalent in China has hit a 10-month high. This is all pretty positive stuff.

Also - home sales rose for the fourth straight month, up 0.5% in April; the qtly Business Indicators publication by the Bureau of Statistics had profits falling by 7.2% in the Mch qtr and inventories down 1.2% and the TD securities monthly inflation gauge fell by 0.3% in May.

It seems our economy has remained pretty flat over the last 6 months and the national accounts tomorrow is likely to reflect this. If so this will be a pretty good result compared to what's gone on in other parts of the world.

Overnight US bonds had their biggest one-day sell off (rise in yields) for 8 months as a stronger stockmarket extra supply and positive economic data reduced their appeal.