May data shows China’s retail sales contracted for the first time since December, weighing on growth expectations and commodity-linked currencies.
China’s retail sales fell 0.6% year-over-year in May, missing the 0% consensus forecast and reversing April’s 0.2% gain. The National Bureau of Statistics reported the decline, marking the first contraction since December 2023 and signaling weaker domestic demand.
Analysts had anticipated stagnation after April’s modest growth, but the sharper drop raises concerns about China’s economic recovery. The data follows mixed signals from industrial production and fixed-asset investment, which also underperformed expectations in May.
The Australian Dollar, sensitive to Chinese demand for commodities, showed limited immediate reaction but remains vulnerable to further downside risks.