Weekly Updates

In Australia, the RBA unexpectedly kept its cash rate target unchanged at 3.85% this week, advising it would like to receive more information to confirm that underlying inflation is coming back to the mid-point of the target range. Data-wise, NAB business conditions and confidence improved markedly in June, following weakness in the previous month.

In Australia, growth in retail trade and dwelling approvals disappointed in May. The goods trade surplus narrowed in May, dragged down by both lower exports and higher imports. The Melbourne Institute inflation gauge suggested that consumer price inflation remained in check in June. The Cotality home value index saw solid gains across most capital cities in June.

In Australia, the monthly CPI indicator suggested that headline and trimmed mean inflation declined further in May and remained within the 2-3% target range. The S&P Global flash PMIs pointed to faster, albeit still quite moderate expansion of the Australian private sector in June. Abroad, S&P Global flash PMIs also pointed to ongoing expansion in the major advanced economies in June.

The Western Australian 2025-26 State Budget again confirmed the solid fiscal position of the State, with ongoing surpluses and debt kept in check. Nationwide, Australian seasonally adjusted employment unexpectedly ebbed in May, but the unemployment rate remained steady at 4.1%.

In Australia, NAB business conditions weakened in May, while business confidence picked up but remained subdued. Westpac consumer sentiment rose a little further in June but is still depressed. Abroad, US inflation figures generally surprised to the downside in May. The Chinese trade figures remained resilient to trade tensions in May, with iron ore imports still high by historical standards.

In Australia, real GDP growth disappointed in Q1, while the current account deficit narrowed amid a decline in the primary income deficit. This was followed by soft household spending growth and a fall in goods trade surplus in April. Home price growth accelerated in May, while the Melbourne Institute inflation gauge pointed to a decline in consumer price inflation in May.