Weekly Updates

In Australia, dwelling approvals saw an unexpectedly strong fall in March, while the household spending indicator saw a surprising decline. The Melbourne Institute inflation gauge pointed to a rise in the annual rates of consumer price inflation. 

In Australia, Q1 CPI figures surprised slightly to the upside, but a decline in trimmed mean inflation to the target band should convince the RBA to cut the cash rate by 25bps later this month. Retail sales volumes were flat in Q1, while nominal retail trade growth in March turned out slightly slower than expected.

The S&P Global Australian flash PMI for April indicated that business activity remained in expansion and input cost and selling price inflation accelerated a little. Consumer confidence picked up a little last week.

Abroad, US President Donald Trump has temporarily exempted electronics from the tariffs on China and hinted that he may pause 25% sectoral tariffs on cars and car parts. However, he also signalled that sectoral tariffs on semiconductors and pharmaceuticals may be coming, while threating China with a 245% tariff rate on some goods and banning sales of some chips in China by US companies.

Abroad, US President Donald Trump delayed implementation of ‘reciprocal’ tariffs above 10% for all countries except China, which saw a hike to 125% and then 145%. This came after retaliatory measures from China to the original April 2 tariffs. US CPI unexpectedly fell in March ahead of the latest tariff round.

In Australia, the RBA left the cash rate unchanged on Tuesday, as expected, but remained cautious about monetary policy easing despite intensifying rate cut expectations. Abroad, US President Donald Trump announced the long-awaited ‘reciprocal’ tariffs on Thursday morning AWST, igniting a sell-off in the global equity markets and a drop in government bond yields.