Australia's May retail sales fall short of expectations, traders betting on rate cut next week intensifies.

Data released by the Australian Bureau of Statistics on Wednesday showed that the retail sales growth in May was lower than expected, prompting traders to further bet that the Reserve Bank of Australia will start its third interest rate cut as soon as next week. The data showed that retail sales increased by 0.2% month-on-month, a slight improvement from zero growth in the previous month but lower than the market's expectation of 0.5%. A series of previous economic data has shown weakening momentum in the Australian economy, including easing inflation pressures, unexpected unemployment, and cautious consumer confidence, all of which have reinforced the necessity for further interest rate cuts by the Reserve Bank of Australia. Derivative traders have fully priced in expectations for three interest rate cuts this year, with one of them possibly landing as early as next Tuesday. As consumer activity accounts for more than half of Australia's Gross Domestic Product (GDP), retail sales data is an important reference for the RBA's monetary policy decisions. When considering further easing measures, the RBA has repeatedly highlighted household spending prospects as a key uncertainty factor. In the last meeting in May, the RBA had forecasted a rebound in household consumption in the near future, but recent data suggests that this rebound may be slower than initially anticipated. The data released on Wednesday also showed that retail sales grew by 3.3% year-on-year; clothing, footwear, and personal accessory retail grew by 2.9%, department stores grew by 2.6%, making them the only two growing industries; food-related spending saw its first decline of the year, with a decrease of 0.4%. The Australian Bureau of Statistics plans to stop releasing retail sales data from July onwards, and will instead begin releasing a more comprehensive monthly report on household consumption starting on Fridays.