JGBS: 5YY Pushed To New Cycle High Ahead Of Today's Supply

• MNI: UK BRC SEP BY VALUE SHOP SALES LFL +2.0% Y/Y, TOTAL +2.3% Y/Y

BRC Retail Sales data for September posted a 2.3% Y/Y increase, a slowdown from the 3.1% of August, and marginally above the 12-month average of 2.1%. However, it is important to note that the monitor is a value measure and a large proportion of the increase is likely due to inflation.

• Food sales (the largest contributor) slowed slightly versus August, growing 4.3% Y/Y (vs 4.7% Aug), though the press release notes that "growth in food sales was largely inflationary rather than volume growth".
• Non-food sales weakened, increasing 0.7% Y/Y (vs 1.8% Aug), below the 12-month average of 0.9%. The figure was propped up by strong electrical sales, from the release of the new iPhone and Apple Watch, and strong furniture sales.
• Planning spending around high inflation and a "potentially taxing Budget" ahead of the Christmas period is highlighted as a notable downward driver by the BRC.
• Note that ONS's retail sales volume index sees the September data released on 24 October, following a 0.5% M/M rise in August. The in the BRC report covers the same 5 weeks as the ONS report (from 31 August - 5 October 2025).

September retail card transactions fell 0.5% m/m after rising 0.6%, the first negative after three consecutive increases. Annual growth slowed to an anaemic 1.2% y/y signalling that while consumption is off its lows the recovery remains weak making additional RBNZ rate cuts more likely. The extent of further easing including in early 2026 remains highly data dependent though. 

NZ retail spending y/y%

Source: MNI - Market News/LSEG

• Despite the soft end to Q3, the quarter saw a 0.6% q/q increase in nominal retail spending driven by consumables (+1.0%), hospitality (+1.4%) and motor vehicles (+2.7%). Q3 retail sales volumes are released 27 November. They rose 0.5% q/q & 2.3% y/y in Q2.
• Total expenditure was down 0.4% m/m in September after rising 0.4% to still be down 1% y/y. The total was up 0.7% q/q in Q3.
• Core retail spending fell 0.4% m/m in September but rose 0.7% q/q in Q3. The September decline was broad based with all the major categories falling except hospitality (+1.5% m/m). Motor vehicles sank 2.6% but consumables were down 0.5%, durables -0.8% and apparel -1.4%.
• Services fell 1% m/m while non-retail spending ex services was flat (includes healthcare but also travel).

NZ card expenditure y/y%