Confidence readings punctuate lull in economic calendar
Central bankers in Australia this week will review consumer and business confidence figures amid a lack of definitive economic data.
Sentiment among households and employers has fallen since the outbreak of conflict in the Middle East in late February.
The Westpac-Melbourne Institute consumer confidence survey, to be published on Tuesday, will give a sense of how much global uncertainty and the federal budget continue to weigh on spending decisions and inflation expectations.
Also on Tuesday, NAB’s business sentiment survey will provide a read on the extent to which businesses are recovering from cost pressures.
Financial markets are fully priced for the Central Bank to keep the cash interest rate at 4.35 percent at its June meeting, but another interest rate increase is expected by the end of the year.
The RBA will focus on the latest inflation and economic growth figures as it prepares for its next interest rate meeting on June 15-16.
The annual consumer price index fell to 4.2 percent in April and GDP growth slowed to 0.3 percent in the March quarter; This has been a seemingly hopeful sign of the RBA’s fight against inflation.
However, the slight increase in headline inflation showed that there was still cause for concern, especially as there were no signs that the Strait of Hormuz would be opened to shipping any time soon.
Speaking before a parliamentary committee in Canberra last week, Reserve Bank governor Michele Bullock downplayed fears that Australia was headed for recession.
Despite the bank’s three interest rate increases so far in 2026 and the impact of the Iran war, the economy was still expected to continue expanding.
The economy is already in a technical recession in Canada, where the central bank is expected to keep the benchmark borrowing rate at 2.25 percent on Wednesday; This means two quarters of negative economic growth.
However, the European Central Bank is expected to raise interest rates by 25 basis points to 2.25 percent on Thursday, as policymakers in Frankfurt try to balance rising inflation with a softening in the economy.
Meanwhile, Wall Street’s nine-week winning streak ended as hot tech stocks suffered their biggest daily decline since May 2025. After a hot jobs report in May fueled fears of hawkish policy action by the US Federal Reserve.
Dow Jones closed Friday at 50,866.78 points, down 695.15 points (1.35 percent), S&P 500 index dropped 2.64 percent at 7,383.74 points, and Nasdaq lost 4.18 percent at 25,709.43 points.
Domestically, traders can expect a sea of red when they return to their desks after a three-day weekend for the King’s Birthday public holiday.
Australian share futures fell 117 points, or 1.35 percent, to 16,558.
The S&P/ASX200 fell 61 points, or 0.7 percent, to 8,625.1 points on Friday, while the All Ordinaries fell 61 points, or 0.68 percent, to 8,855.9 points.
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