The strength of the national economy will take centre stage this week as financial markets turn their attention to the federal budget and a fresh round of confidence and spending data.
Last week, the central bank trimmed its growth projections and now sees gross domestic product bottoming out at 1.25 per cent by the end of this year, down from 1.5 per cent.
Growth is then likely to gradually pick up to two per cent by mid-2025, the Reserve Bank of Australia said in its quarterly statement on monetary policy released on Friday.
This outlook will be measured against the new federal Treasury’s growth forecasts in the budget to be handed down by Treasurer Jim Chalmers at 7.30pm on Tuesday.
But earlier on Tuesday, new data on business and consumer confidence and consumer spending will be published.
The National Australia Bank business survey for April will deliver the latest measures on conditions and whether firms are absorbing costs or passing them on.
CommSec’s Craig James says the data could have implications for business margins, profits and broader economy-wide inflation.
The May Westpac-Melbourne Institute consumer confidence report will also be released, along with Australian Bureau of Statistics retail trade numbers for the March quarter and the Commonwealth Bank of Australia’s household spending indicators for May.
The Reserve Bank, which has raised interest rates 11 times since May 2022 in a bid to curb inflation, keeps a close watch on retail data for signals on consumer spending and confidence.
Meanwhile, the Australian stock market looks set to open higher this week after Wall Street finished stronger on Friday.
The US market rallied after Apple Inc issued upbeat quarterly results and US jobs data pointed to a resilient labour market.
The S&P 500 gained 74.55 points, or 1.84 per cent, to end at 4,135.77 points, while the Nasdaq Composite gained 264.67 points, or 2.21 per cent, to 12,231.07 and the Dow Jones Industrial Average rose 541.01 points, or 1.63 per cent, to 33,668.75.
The most traded Australian share price index futures contract followed, gaining 64 points or almost one per cent to 7,284 points, which implies a stronger open on Monday.
On Friday, the local bourse closed higher, with the benchmark S&P/ASX200 index up 26.9 points, or 0.37 per cent, to 7,220, and the broader All Ordinaries 24.9 points, or 0.34 per cent, higher to 7,413.
— AAP
