Hongkong's retail sales were probably soft in May

Hong Kong will release May retail sales data on 29 June.

Fewer mainland tourist arrivals are expected to have weighed on overall retail spending, in addition to a less favourable base effect than in April. Mainland visitors are also spending less per head as they move from high-value goods to lower-value ones. 

"Retail sales are expected to have grown 1.6% y/y by volume, and -2.8% by value, versus 2.4% and -2.2%, respectively, in April", says Standard Chartered. 

However, the good news is that the labour market is still tight, supporting domestic household spending; this should limit downside risk to retail sales growth in H2, despite the headwind of fewer mainland visitors.