What's On Your Screen Is Not Necessarily The News; Dealers Confused By Blunder Down Under

Australian financial markets were thrown for a loop when the two primary electronic news sources, AAP-Reuters and AP-Dow Jones, issued contradictory reports on a key economic indicator.

AAP Reuters, carried on the Reuter Monitor network, reported that retail sales were up, while AP-Dow Jones, carried on Telerate, said the sales figure was down. Increasing sales can be evidence of an overheating economy. Decreasing sales indicate a moderating economy.

Australian Treasury bill futures bounced around within a ten basis point range on the morning of Oct. 25 as perplexed dealers tried to make sense of what they saw on their screens.

Speaking at a Sydney press briefing that morning, Australian Prime Minister Robert Hawke inadvertently leaked retail sales figures for the month of July. The irrepressible Hawke told reporters of a 1.9% slump in retail sales almost two hours ahead of scheduled release time.

Apparently Hawke's diction was not too clear because reporters from the two news agencies didn't agree on the direction retail sales had taken.

An internal memorandum obtained by TST describes the ensuing hubbub from the perspective of Telerate employee Trevor Thomas:

"10:21 am -- AAP files a story on Reuter Monitor quoting Prime Minister Hawke as having 'leaked' retail sales data (due at 11:30 am). Reuters reported, 'He said seasonally adjusted retail sales rose 1.9% in July and 5.4% for the year to the end of July.'

10:35 am -- A market source phones Trevor Thomas, reads Reuters story and asks if he knows anything.

10:38 am -- TT calls AP-Dow Jones and passes on information. AP/DJ replies that its man in Canberra was at the press conference but that AP/DJ had not heard about the 'leak.'

10:41 am -- TT calls market source to confirm story and report that AP/DJ is preparing its account.

10:42 am -- TT calls AP/DJ for update. AP/DJ says its man says Hawke said retail sales fell 1.9%. The reporter is checking his tape recording.

10:45 am -- TT calls AP/DJ and reports that Telerate's Sydney economist has checked and rechecked the available numbers. After analyzing the relationship between these statistics, Telerate's economist concludes that a fall of 1.9% is consistent with YTD growth of 5.4%. AP/DJ confirms that the PM said 'fall' having rechecked an audio tape recording.

10:49 am -- TT calls market source and confirms that Hawke said retail sales fell.

11:00 am -- AP/DJ files story on Telerate reporting Hawke's 'leak' of fall.

11:10 am -- Reuters reaffirms that Hawke said 'rise,' claiming to have replayed tapes.

11:20 am -- Knight-Ridder reportedly confirms AP/DJ version.

11:30 am -- Market beset with confusion. Numerous calls to both services. 11:30 am -- Official data shows a fall of 1.9%.

11:31 am -- Reuters issues a 'Mandatory kill' of story. Story wiped from pages.

4:30 pm -- Market source calls TT and suggests that his contribution might warrant a lunch. TT agrees.

Later -- Rumor has it that unemployment in Australia rose by one person as 'mandatory kill' was issued on one Reuters journalist."

The moral of the story: You can't always believe what you see on your CRT.