[MownySue]

The retail sales data released overnight add to the case for the RBA to begin taking back its emergency rate cuts soon and are positive for the AUD (+0.9% m/m vs. consensus: +0.5%). The market has priced in some risk of a hike at the October meeting - but the RBA will tread carefully given the relatively weak building approvals and credit data that were also released overnight and the additional uncertainty that consumption is holding up following the reduction in fiscal stimulus. The RBA will talk with retailers, and if these discussions suggest that sales remained reasonable in September, we feel that it is likely to hike rates in November.