$A below parity after US retail sales rise

THE Australian dollar is holding below parity with the US greenback following better-than-expected American retail sales data.

At 0700 AEST on Tuesday, the local currency was at 99.53 US cents, almost half a US cent below Monday's close of 100 US cents.

On Tuesday, the local currency started the trading session below parity with the US unit for the first time in 11 months, as a 0.1 per cent rise in American retail sales for April buoyed the greenback.

Bank of New Zealand currency strategist Mike Jones said the unexpected result, which beat forecasts of a 0.3 per cent drop, dealt a blow to the Australian dollar.

"The Aussie stands out as the weakest link on currency markets overnight," he told AAP.

"Generally speaking, it's been relatively quiet but Aussie dollar weakness has been eye-catching.

"It's more a US story than an Aussie-specific story."

The fall also follows a 9.3 per cent rise in Chinese industrial output for April, which was below the 9.5 per cent level expected by economists.

Mr Jones said the Australian dollar was likely to stay below parity with the US greenback on Tuesday, ahead of the federal budget.

"Today's session probably is going to be all about consolidation for the Aussie dollar."

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McDonald's sales slip on bird flu fears

Carlos Gonzalez and Elsa Guzman eat breakfast at a McDonald's restaurant in New York. The fast food chain has introduced healthier options, but sales in April slipped amid fears of bird flu in China. Picture: AP Source: AP

MCDONALD'S says a key sales figure slipped again in April, with the world's biggest hamburger chain citing fears over a new strain of avian flu for weakness in China.

The Oak Brook, Illinois-based fast food chain, which had warned of a decline last month, says the figure fell 0.6 per cent globally.

That reflected an increase of 0.7 per cent in the US, where it recently introduced its chicken McWraps to attract more customers in their 20s and 30s.

But it fell 2.4 per cent in Europe, its biggest market by sales. The company said it's working to improve results in the region by emphasising "everyday affordability" and keeping stores open longer.

In the region encompassing Asia, the Middle East and Africa, it was down 2.9 per cent. The chain blamed the impact of the avian flu in China for the decline, as well as softness in Japan and Australia.

Yum Brands, which owns KFC and is China's biggest Western fast-food company, has been slammed by the new strain of avian flu as well. It warned late last month that sales at established restaurants in China were down about 30 per cent in April. Yum is also trying to recover from a controversy over its chicken suppliers that surfaced late last year.

After years of outperforming rivals, McDonald's has been struggling to boost sales as it faces intensifying competition, changing eating habits and weak growth in the broader restaurant industry. Late last year, the company reported a decline in its monthly sales figure for the first time in nearly a decade. Soon after, the company ousted the head of its US division.

McDonald's CEO Don Thompson, who took over the top spot this summer, has said repeatedly that the company will focus on emphasizing value to capture market share in the tough environment. Analysts have raised concerns that the strategy could eat into profit margins. But McDonald's executives say that short-term sacrifice is necessary to build customer loyalty and ensure the long-term health of the company.

The chain is also working to make its food more relevant to shifting tastes. Its chicken McWraps, for example, are intended to cater to people who are seeking out fresher, healthier items. The company also recently introduced a lower-calorie version of its Egg McMuffin made with egg whites and a whole grain muffin.

Sales at restaurants open at least 13 months is a key metric because it strips out the impact of newly opened and closed locations.

McDonald's, which was more than 34,000 locations around the world, noted that it had one less Sunday and one more Tuesday in April of this year compared with April of last year. Sales are generally stronger on weekends.

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US bill to tax online sales

FOR online shoppers in the US the days of tax-free internet shopping may soon be at an end.

The US Senate is scheduled to vote on Monday on a bill that would empower states to collect sales taxes for purchases made over the internet. The measure is expected to pass because it has already survived three procedural votes. But it faces opposition in the House, where some Republicans regard it as a tax increase. A broad coalition of retailers is lobbying in favour of it.

Under current law, states can only require retailers to collect sales taxes if the store has a physical presence in the state.

That means big retailers with stores all over the country like Walmart, Best Buy and Target collect sales taxes when they sell goods over the internet. But online retailers like eBay and Amazon don't have to collect sales taxes, except in states where they have offices or distribution centres.

As a result, many online sales are tax-free, giving internet retailers an advantage over brick-and-mortar stores.

The bill would empower states to require businesses to collect taxes for products they sell on the internet, in catalogues and through radio and TV ads. Under the legislation, the sales taxes would be sent to the states where a shopper lives.

The measure pits brick-and-mortar stores against online services.

As internet sales have grown, "It's putting pressure on the brick-and-mortar competitors and it's putting pressure on state and local sales tax revenues," said David French, senior vice-president of government relations for the National Retail Federation. "It's time for Congress to create a level playing field so that all retailers are treated fairly."

On the other side, eBay says the bill doesn't do enough to protect small businesses. Businesses with less than $US1 million in online sales would be exempt. EBay wants to exempt businesses with up to $US10 million in sales or fewer than 50 employees.

"Complying and living under the tax laws of 50 states is a major undertaking because the process of complying with tax law goes far beyond just filling out the right forms," said Brian Bieron, eBay's senior director of global public policy.

Supporters say the bill makes it relatively easy for internet retailers to comply. States must provide free computer software to help retailers calculate sales taxes, based on where shoppers live. States must also establish a single entity to receive internet sales tax revenue, so retailers don't have to send them to individual counties or cities.

Opponents say online businesses would still have to use resources to account for the taxes they collect and to periodically send the money to each state.

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Renault sales slide in first quarter

FRENCH automaker Renault says sales in the first quarter of 2013 fell 11.6 per cent year-on-year to 8.27 billion euros ($A10.55 billion) but maintained its outlook for the year.

Vehicle sales worldwide fell by 4.7 per cent to 608,455 units, the company said, due to a poor performance in Europe where unit sales fell by 11.6 per cent, worse than the overall market which was down 10 per cent.

Renault added it believes the French and European markets will both contract by five per cent this year, despite the global market expanding a projected three per cent.

Sales in the Americas fell, down eight per cent in an overall market rising 1.6 per cent, which the company said was due to a plant renovation currently underway in Brazil.

Sales in Eurasia however skyrocketed 20.8 per cent, well above the market rise of 1.8 per cent and making Renault the biggest seller in Russia after domestic company Lada.

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US sees stronger ebook sales

The growth in e-book sales may be slowing but they provided 23% of US publishing revenues in 2012. Source: AAP

ELECTRONIC books provided 23 per cent of US publishing revenues in 2012 but sizzling growth rates have eased, according to industry figures.

The Association of American Publishers said ebooks gained ground in all categories - adult fiction and non-fiction, young adult and children's and religious publishing - and helped the industry increase revenues six per cent to $US7.1 billion ($A6.7 billion) for the year.

The percentage of revenues from ebooks rose to 23 per cent of net publisher revenues in 2012, from 17 per cent in 2011 and just one per cent in 2008, the trade group said.

Growth in ebook sales was 41 per cent - an impressive figure but below the red-hot pace of recent years including 2011, when ebook sales doubled.

For adult fiction and non-fiction, ebooks provided $US1.3 billion in revenue, a 33 per cent gain.

Sales of children's ebooks were up 120 per cent in 2012 to $US233 million, driven by huge gains from titles like The Hunger Games.

The association said December data showed slower growth than in the past, suggesting the market is losing momentum.

Adult fiction and non-fiction ebooks showed a gain of 20 per cent in December versus the previous year, and sales of children's ebooks fell 21 per cent.

"In 2012, ebook revenue growth hit an inflection point - where it went from reliable triple-digit increases to double-digit increases," the group said in a statement.

"January 2013 could be a month of big increases following a holiday season during which many readers unwrapped new e-readers and tablets."

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Dollar gains on solid US retail sales data

THE dollar rebounded after losing against the euro for two days, as strong US retail sales data highlighted the continuing divergence between the American and European economies.

The euro fell to $1.2962 at 2200 GMT (0900 AEDT, Thursday) - compared to $1.3035 late Tuesday - after the US Commerce Department released data showing retail sales gaining 1.1 per cent in February over the month before, despite an increase in payroll taxes that hit pay in January.

Stripping out often volatile autos, petrol and building materials, core sales were up a solid 0.4 per cent.

"The data are consistent with total real consumption rising at around a 2.8 per cent annual rate so far" in the first quarter, said Jim O'Sullivan, US economist at High Frequency Economics.

"That is an impressive performance given the hit to spending power from the payroll tax hike."

The yen slipped as politicians in Tokyo debated the strongly pro-stimulus team nominated to lead the Bank of Japan.

According to reports, Japan's largest opposition party said it would not back the nomination of Kikuo Iwata to serve as the Bank of Japan's deputy governor.

Iwata, along with the nominee for governor Haruhiko Kuroda, is a strong supporter of giving more control of the BoJ to the government, and is also an advocate of further aggressive monetary easing.

The dollar gained to 96.14 yen from 96.05 yen late Tuesday, while the euro rose to $1.2453 yen from 1.2344.

The British pound edged higher to $1.4922 from $1.4903, while the dollar rose to 0.9525 Swiss francs from 0.9468 francs.

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$A higher on better retail sales

THE Australian dollar is higher following the release of better than expected retail sales figures.

At 1200 AEDT on Tuesday, the currency was trading at 102.14 US cents, up from 101.25 US cents on Monday afternoon.

The Australian dollar dropped to an eight-month low of 101.16 US cents on Monday before recovering overnight amid gains on US stock markets.

OzForex chief currency strategist Jim Vrondas said the Australian dollar received a further boost from better-than-expected retail trade figures at 1130 AEDT.

Figures released by the Australian Bureau of statistics on Tuesday show retail spending rose 0.9 per cent in January, after three months of decline in the sector.

"Those numbers came in better than expected and that gave the Aussie dollar a bit of a boost," he said.

Mr Vrondas said the key driver for the currency on Tuesday afternoon would be the Reserve Bank of Australia's monthly interest rate decision at 1430 AEDT.

The RBA is expected to keep the cash rate on hold at three per cent, but Mr Vrondas said traders would be looking closely at the accompanying statement for signs of the RBA's future intentions.

"We're of the view that they might not be as dovish as the market expects, so we could see the Aussie dollar squeeze higher and maybe push back to 102.50 US cents," he said.

Meanwhile, Australian bond futures were weaker at noon.

At 1200 AEDT on Tuesday, the March 10-year bond futures contract was trading at 96.715 (implying a yield of 3.285 per cent), down from 96.750 (3.250 per cent) on Monday.

The March three-year bond futures contract was at 97.250 (2.650 per cent), down from 97.310 (2.690 per cent).

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Home sales rise fourth time in a row

NEW home sales have risen for a fourth consecutive month as the momentum of late 2012 carries into the new year, the Housing Industry Association (HIA) says.

The HIA New Home Sales report, a survey of Australia's largest volume builders, shows that, seasonally-adjusted, new home sales increased by 4.2 per cent in January.

That reflects a four per cent increase in detached house sales and a 4.9 per cent lift in multi-unit sales.

Over the three months to January, new home sales increased by 10 per cent, although sales volumes were still 6.4 per cent lower compared to the same period a year earlier, HIA chief economist Harley Dale said on Thursday.

Mr Dale said the upward trend over three months was crucial given the considerable weakness experienced through most of 2012.

"Even now, the volume of detached house sales is not much more than half the long-term average," Mr Dale said in a statement.

"There is a long way to go to see evidence that new home building will reach the levels the economy requires as the contribution from resources-related investment wanes."

Over the three months to January, detached house sales increased by 23.7 per cent in New South Wales, 13.2 per cent in South Australia, 10.8 per cent in Victoria, and 7.6 per cent in Western Australia.

But they fell 3.1 per cent in Queensland.

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Lego sales soar 25%

DANISH toy maker Lego says sales soared 25 per cent last year thanks partly to the new Lego Friends series of building blocks designed for girls.

The privately owned company says on revenue of 23.4 billion kroner ($A4.12 billion) it made net profits of 5.6 billion kroner, up 38 per cent.

The company, based in western Denmark, said on Thursday series like Lego Star Wars and Lego Ninjago were among the more popular.

But it was the novel rollout for girls, Lego Friends, that sold much better than expected - to the extent the company was unable to keep up with demand.

CEO Joergen Vig Knudstorp says Lego has shown it can develop toys children across world "put at the top of their wish lists".

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