Oil rises further and US stocks drop as markets fear a longer Middle East conflict and higher inflation. ANZ Research has upgraded its forecast for Q4 GDP out today, and Australia’s housing market and consumers start to soften as the RBA says March’s rate meeting is ‘live’.
And then in our deep-dive interview, ANZ Senior China Strategist Zhaopeng Xing analyses how China’s economy is placed to withstand the Iran oil price shock.
5 things to know in 5 minutes:
Oil continued to rise - it was up 7% overnight - and stocks dropped around the world as fears grew that the current Middle East conflict will be lengthier than markets first thought. Inflation fears have seen traders pull back bets that the Federal Reserve will be able to cut twice this year. ANZ Head of G3 Economics Brian Martin says central bankers are likely to take a ‘wait and see’ approach.
Australia’s economy may have grown slightly stronger at the end of 2025 than previously expected. ANZ Research has upgraded its forecast to 0.7%. ANZ Senior Economist Adelaide Timbrell says the final partial indicators out yesterday, including public inventories, prompted the bump.
Adelaide says household consumption looks set to lead the quarterly growth. Household spending indicators were strong in October and November.
Australian households aren’t feeling so flush right now though. The four-week moving average of the ANZ Roy Morgan Australian Consumer Confidence series is at its lowest since December 2023. ANZ Economist Sophia Angala says households have turned less confident following the RBA’s February hike.
Confidence may take a further tumble after RBA Governor Michele Bullock said yesterday that March’s rate call meeting is ‘live’ following that strong January price data. Sophia says data yesterday also showed Australia’s housing market started to cool in February.
Bernard.
PS: Catch you tomorrow with all the reaction to Australia’s Q4 GDP and what it could signal for the RBA.
