Australian GDP growth slows as real household incomes drop, supporting ANZ Research’s view the Reserve Bank of Australia (RBA) will stay on hold. And New Zealand building consents remain strong despite a market downturn.
In our deep-dive interview, ANZ’s Head of Agribusiness Mark Bennett outlines how the Middle East conflict has affected key agricultural sector inputs.
5 things to know in 5 minutes:
Brent was up over 2% and the S&P 500 was down half a percent at 4am Sydney/Melbourne time, after renewed clashes in the Middle East conflict. Meanwhile, US services PMI sector data was stronger than expected in May as new orders rose. But ANZ Head of G3 Economics Brian Martin says employment fell, which fits into a picture of soft consumption growth.
Australia’s GDP growth slowed from a revised 0.9% in December to just 0.3% in the March quarter. ANZ Economist Sophia Angala says, on an annual basis, growth held up at 2.5%. But there are signs of a softer pace of growth through 2026.
Sophia says the data supports ANZ Research’s view that the RBA will keep rates on hold at 4.35%.
New Zealand residential building consents were up 11% in the month of April, to be up 16% year on year. ANZ Senior Economist Matt Galt says it’s a surprisingly strong result, albeit buoyed by the volatile apartments category. But it may not last as the market turns.
New Zealand’s merchandise terms of trade dipped 2% in the March quarter, as export prices dropped, led by dairy prices. Matt says the effect of the Middle East conflict on import prices is likely to show through in Q2.
Cheers,
Bernard.
PS: Catch you tomorrow with a look at how Australia’s trade performed in April amid the Middle East conflict.
