Australia and New Zealand: Weekly Outlook
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In its Australia and New Zealand weekly outlook, JPMorgan argues the Reserve Bank of Australia's May hike will prove the last of the tightening cycle, with the next move a cut in 2027 and a drift toward neutral from 2H27, even as the RBA retains hawkish rhetoric and a tightening bias so markets keep pricing some probability of further tightening this year. With inflation breadth at multi-year lows reducing second-round risks, June data reinforced the view: household spending rose 0.8% month over month, well above JPMorgan and consensus forecasts, led by EVs, air travel and leisure; Q2 real consumption grew 0.7% quarter over quarter, with the annualized pace slowing from 2.7% in Q1 to 2.4%. The June nominal goods trade surplus rebounded to A$1.9bn as exports jumped 9.6% month over month, with coal shipments up 25% year over year. In New Zealand, Q2 unemployment rose 0.2ppt to 5.6%, contrary to JPMorgan and consensus expectations and to broadly stronger activity and inflation data; citing labor-supply factors including immigration, JPMorgan looks through the print and maintains its call for another RBNZ hike in September, then a pause. It also expects 2Q26 new housing loan commitments to contract for a second straight quarter and sees the 2026 fiscal pulse turning into a headwind.