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US Markets
Australian Household Spending Up 1.6% in March Amid Middle East Oil Shock
Australian household spending surged in March at its quickest pace in two years, driven by soaring oil prices from the Middle East conflict.Seasonally adjusted household spending climbed 1.6% month on month, a sharp acceleration from the previous month's 0.3% uptick, although slightly below the 1.8% growth forecast by markets, according to data from the Australian Bureau of Statistics on Tuesday."Household spending rose strongly in March, driven by a 5.1% rise in transport costs as fuel prices climbed in response to the conflict in the Middle East," ABS head of business statistics Tom Lay said.Fuel costs peaked in late March after conflict in Iran disrupted global oil markets, particularly through the closure of the Strait of Hormuz.This surge also pushed up public transit usage as commuters avoided driving private vehicles, while food spending rose 1.7% due to consumers stockpiling goods over supply chain fears.Commonwealth Bank senior economist Ashwin Clarke noted that higher fuel costs should trigger an easing in spending growth later this year."We do expect a further easing in spending growth over the course of the year," Clarke said. "The expected slowing in household consumption is needed for the economy to slow and move closer to balance."ANZ analysts shared the cautious outlook, with economist Aaron Luk and head of Australian economics Adam Boyton saying that "Despite a relatively solid outcome for the first quarter of the year, we continue to anticipate a softer pace of spending growth ahead."Some analysts believe the central bank has room to combat inflation because household spending has remained resilient despite the oil shock.Capital Economics said the Reserve Bank of Australia will have no "major qualms about tightening policy further," as household spending is "holding up well in the face of the oil price shock", Bloomberg News reported.The RBA on Tuesday raised the official cash rate by 25 basis points to 4.35% amid higher inflation, reacting to inflationary pressures stoked by the Iran conflict.
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Asia Markets
Australian Shares Fall as RBA Raises Cash Rate; Regis Resources to Acquire Vault Minerals in Merger of Equals
Australian shares fell on Tuesday after the Reserve Bank of Australia (RBA) decided to increase the official cash rate by 25 basis points to 4.35%.The S&P/ASX 200 Index retreated nearly 0.2%, or 16.60 points, to close at 8,680.50, setting a new 20-day low.Brent crude oil futures fell to $112.93 per barrel. The US and Iran conducted new attacks in the Persian Gulf in a bid to enforce blockades in the waterway. Maersk said the Alliance Fairfax, a US-flagged vehicle carrier operated by its Farrell Lines unit, exited the Strait of Hormuz accompanied by US military assets on Monday, Reuters reported.On the domestic front, Australia's seasonally adjusted household spending rose 1.6% to AU$80.41 billion in March, following a 0.3% increase in the previous month, the Australian Bureau of Statistics reported.The central bank said inflation picked up materially in the second half of 2025, with information since the beginning of 2026 confirming that some of the increase reflected greater capacity pressures. The RBA noted that the Middle East conflict has resulted in sharply higher fuel and related commodity prices already adding to inflation, with early signs that many firms experiencing cost pressures are looking to increase prices of goods and services.Australia's service sector returned to expansionary territory in April, helped by a recovery in business activity following a contraction in March. The S&P Global Australia Services PMI Business Activity Index rose to 50.7 in April from 46.3 in March.In company news, Regis Resources (ASX:RRL) agreed to acquire Vault Minerals (ASX:VAU) in a merger of equals to create a major gold producer that is expected to produce more than 700,000 ounces of gold per year through five operating assets across Western Australia. Under the proposed deal, Vault shareholders will receive 0.6947 shares in Regis for each Vault share owned. Regis' shares fell over 5% at market close, while those of Vault rose nearly 3%.Westpac Banking (ASX:WBC, NZE:WBC) reported fiscal first-half earnings of AU$1.014 per share excluding notable items, up from AU$0.998 a year earlier. Net operating income for the six months ended March 31 was AU$11.28 billion, compared with AU$10.99 billion a year earlier. Its shares closed down nearly 2%.Lastly, Magellan Financial Group (ASX:MFG) appointed Vinva Investment Management as the investment manager of certain global equity funds. The investment strategy for the Magellan Global Fund Open Class Units Active ETF and the Magellan Global Fund Hedged, which had about AU$5.3 billion of assets under management at the close of April, will be changed to the Vinva Global Alpha Strategy. Its shares fell over 6% on market close.
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International
Swiss Annual Inflation Rate Rises to 0.6% in April
Switzerland's annual inflation rate stood at 0.6% in April, up from 0.3% in the previous month, according to data from the country's Federal Statistical Office published Tuesday.On a monthly basis, consumer prices were 0.3% higher, compared with the previous 0.2% gain and the expected 0.4% growth.
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