Weekly Updates

Domestically, the NAB business report saw steady business conditions in March but a slump in confidence, while the Westpac consumer sentiment survey saw confidence drop to the lowest levels since April 2020. Consumer inflation expectations jumped to the highest level since 2022 in April.

In Australia, household spending saw a moderate increase in February, ahead of the escalation in the Middle East. The Melbourne Institute inflation gauge suggested an acceleration in consumer price growth in March, while ANZ-Indeed job ads declined.

In Australia, the RBA minutes confirmed that a split in the vote for a cash rate hike in March was about the timing, not the direction of monetary policy. Cotality average home prices rose further in March, though Sydney and Melbourne saw declines, which followed a bounce in dwelling approvals in February driven by units and townhouses.

In Australia, annual CPI inflation rates held broadly steady ahead of the escalation in the Middle East. ANZ Roy Morgan consumer confidence reached the lowest level on record last week (since 1973), while consumer inflation expectations climbed to a record high.

At home, the RBA increased the cash rate target to 4.10%, as expected, and at least another hike is fully priced in by the markets in the coming months. Employment growth in February exceeded the market consensus, while the unemployment rate saw an unexpected increase.

In Australia, hawkish comments by RBA Deputy Governor Andrew Hauser led to intensification of cash rate expectations. Westpac consumer sentiment improved a little in March, but Melbourne Institute inflation expectations spiked.