Key insights from the week that was.
Australia’s main market event this week was the April CPI which came in slightly below consensus on a headline basis (0.4%, 4.2%yr). Volatile, policy-driven components related to travel drove the outcome – the Federal Government’s temporary halving of fuel excise and some state governments offering free public transport, while cancelled flights and refunds for holiday travel provided a partial offset. These dynamics were also the main factors behind household spending’s April decline.
Trimmed mean inflation meanwhile met expectations (0.3%, 3.4%yr). Pass-through of higher fuel costs is evident in some areas – home-building costs registered its strongest monthly gain since November 2023. However, the pass-through is not unfolding as rapidly as we initially feared. While April’s outcome will give the RBA space to pause and assess in June, the risk of a larger and faster pass-through in coming months is material. We believe the RBA will feel compelled to resume raising the cash rate in the second half of the year as these risks crystalise.
In the run-up to Q1 GDP next Wednesday, we also received two partial indicators for investment.
Construction activity rose 3.4% in Q1, pushing annual growth to 6.3%yr. This outsized gain was mostly driven by a large mining infrastructure installation in WA – lumpy completions like these have a much smaller impact on National Accounts estimates which are reported on an accrual basis. Activity was weak elsewhere, residential construction dipping 0.6% despite a solid project pipeline, and public infrastructure works trending lower, down –3.2%.
Private CAPEX subsequently surprised to the upside, surging 6.5% in Q1 to be up 14.6% over the year. Data centres were responsible for almost all the increase: machinery and equipment spending in the information and telecommunications sector almost tripling (+196%) in Q1 alone. It should be noted that the net impact on GDP will be limited given the high import component of the data centre build-out. The second estimate of 2026/27 CAPEX plans provided an upgrade; adjusting for inflation, real investment intentions remained resilient as the Middle East conflict began.
While these headline estimates have their caveats, the underlying detail suggests there is some modest upside risk to Q1 GDP. Our preview will be published later today on Westpac IQ.
This week’s offshore data provided little fresh signal and, for the market, paled in significance to perceived progress towards a truce in the Middle East. Intermediated negotiations between the US and Iran continued throughout the week despite several US strikes on Iranian military assets in the Strait, which were perceived to be active threats to shipping and dealt with. The successful transiting of several ships was instead focused upon as evidence to an end to the conflict was near. Having tested the top of 2026’s range early last week, circa US$110 per barrel, the price of Brent crude has since fallen to around US$94.
As we go to press, reports suggest a 60-day ceasefire has been agreed to by the US and Iran, but this time it includes a full resumption of shipping through the Strait within a month. The intent is to allow supply of energy and other goods to resume, alleviating stress on the Iranian and global economy, while negotiations continue over Tehran’s nuclear program. President Trump still needs to agree to the deal, however. And, further ahead, while November’s US mid-term elections will, if necessary, arguably warrant an extension of the ceasefire to year end, the complexity and significance of the nuclear negotiations could see the conflict flare again in 2027. For the foreseeable future, the price of oil and downstream margins are likely to depend not only on the current balance of physical demand and supply, but also a heightened awareness of political risk.
Of this week’s US data, releases related to the consumer were most notable. The second estimate for US GDP was revised down from 2.0% annualised to 1.6%, in large part due to weaker consumption growth. At 1.4% annualised, the current consumer pulse is well below the historic trend circa 2.5% and looks to be entrenched – real personal consumption up just 0.1% in April as wage growth failed to keep pace with inflation (0.2%). Housing is also clearly under pressure, S&P Cotality house prices falling for a second consecutive month (-0.2%, +0.8%yr), and new home sales down 6.2% in April after March’s gain was halved from 7.4% to 3.4%.
FOMC members prioritising inflation risks is notable given the subdued pulse for housing demand. While market participants have been debating the probability of a fed funds rate hike(s) over the coming year, for activity it is the implications for the long end of the yield curve that matter most. The FOMC may find they do not need to hike, as we currently forecast, because inflation risks and fiscal uncertainty result in a modest uptrend in the US 10-year yield. Since mid-April, the US 10-year has risen as much as 40bps to 4.67% because of these factors. Now at 4.44%, we see it rising to 4.75% by mid-2028.
Editorial note: This recovered market brief has been cleaned and reclassified by Next Move Markets for educational market intelligence. It is not investment advice.
Next Move Markets desk view
For active traders, this brief should be read through the lens of global markets rather than as a standalone headline. The key question is whether the theme behind Cliff Notes: AI Goes From Strength to Strength can influence positioning beyond the first reaction. That means watching liquidity, macro data, sentiment, positioning and cross-asset confirmation together, not in isolation.
A richer trading read comes from separating the catalyst from confirmation. The catalyst explains why markets are paying attention; confirmation comes from price action, liquidity and cross-asset behavior after the headline is digested. If those signals do not align, traders should treat the move as fragile and keep risk tighter.
What traders should watch next
- Whether price action confirms the headline after the first reaction has passed.
- How related markets respond, because isolated moves are easier to reverse.
- Any follow-up data or official comment that changes the original market assumption.
- Volatility and liquidity conditions, which should guide risk size before direction.
Risk context
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
Scenario map
The base case is that traders keep this theme on the radar while waiting for confirmation from liquidity, macro data, sentiment, positioning and cross-asset confirmation. A stronger continuation scenario requires follow-through after the first reaction, preferably with related assets moving in the same direction. A failure scenario develops if the headline is quickly absorbed, volatility fades and price returns inside the previous range.
For global markets, the most useful approach is to compare the article theme with live market behavior. If the market confirms the narrative, pullbacks can become more constructive. If the market rejects it, the headline becomes background noise rather than a trading driver.
Execution discipline
- Define the level first: traders should know where the idea is invalidated before thinking about upside or downside.
- Separate news from setup: Cliff Notes: AI Goes From Strength to Strength may explain attention, but entry quality still depends on timing, liquidity and risk/reward.
- Watch confirmation: a clean move usually appears across related markets, not only in one isolated instrument.
- Control exposure: if volatility expands, smaller position sizing can be more professional than chasing the headline.
Next Move Markets treats this kind of brief as a starting point for preparation: identify the driver, map the scenarios, then wait for the market to prove which path is actually being priced.
Next Move Markets desk view
For active traders, this brief should be read through the lens of global markets rather than as a standalone headline. The key question is whether the theme behind Cliff Notes: AI Goes From Strength to Strength can influence positioning beyond the first reaction. That means watching liquidity, macro data, sentiment, positioning and cross-asset confirmation together, not in isolation.
A richer trading read comes from separating the catalyst from confirmation. The catalyst explains why markets are paying attention; confirmation comes from price action, liquidity and cross-asset behavior after the headline is digested. If those signals do not align, traders should treat the move as fragile and keep risk tighter.
What traders should watch next
- Whether price action confirms the headline after the first reaction has passed.
- How related markets respond, because isolated moves are easier to reverse.
- Any follow-up data or official comment that changes the original market assumption.
- Volatility and liquidity conditions, which should guide risk size before direction.
Risk context
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
Scenario map
The base case is that traders keep this theme on the radar while waiting for confirmation from liquidity, macro data, sentiment, positioning and cross-asset confirmation. A stronger continuation scenario requires follow-through after the first reaction, preferably with related assets moving in the same direction. A failure scenario develops if the headline is quickly absorbed, volatility fades and price returns inside the previous range.
For global markets, the most useful approach is to compare the article theme with live market behavior. If the market confirms the narrative, pullbacks can become more constructive. If the market rejects it, the headline becomes background noise rather than a trading driver.
Execution discipline
- Define the level first: traders should know where the idea is invalidated before thinking about upside or downside.
- Separate news from setup: Cliff Notes: AI Goes From Strength to Strength may explain attention, but entry quality still depends on timing, liquidity and risk/reward.
- Watch confirmation: a clean move usually appears across related markets, not only in one isolated instrument.
- Control exposure: if volatility expands, smaller position sizing can be more professional than chasing the headline.
Next Move Markets treats this kind of brief as a starting point for preparation: identify the driver, map the scenarios, then wait for the market to prove which path is actually being priced.
Next Move Markets desk view
For active traders, this brief should be read through the lens of global markets rather than as a standalone headline. The key question is whether the theme behind Cliff Notes: AI Goes From Strength to Strength can influence positioning beyond the first reaction. That means watching liquidity, macro data, sentiment, positioning and cross-asset confirmation together, not in isolation.
A richer trading read comes from separating the catalyst from confirmation. The catalyst explains why markets are paying attention; confirmation comes from price action, liquidity and cross-asset behavior after the headline is digested. If those signals do not align, traders should treat the move as fragile and keep risk tighter.
What traders should watch next
- Whether price action confirms the headline after the first reaction has passed.
- How related markets respond, because isolated moves are easier to reverse.
- Any follow-up data or official comment that changes the original market assumption.
- Volatility and liquidity conditions, which should guide risk size before direction.
Risk context
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
Scenario map
The base case is that traders keep this theme on the radar while waiting for confirmation from liquidity, macro data, sentiment, positioning and cross-asset confirmation. A stronger continuation scenario requires follow-through after the first reaction, preferably with related assets moving in the same direction. A failure scenario develops if the headline is quickly absorbed, volatility fades and price returns inside the previous range.
For global markets, the most useful approach is to compare the article theme with live market behavior. If the market confirms the narrative, pullbacks can become more constructive. If the market rejects it, the headline becomes background noise rather than a trading driver.
Execution discipline
- Define the level first: traders should know where the idea is invalidated before thinking about upside or downside.
- Separate news from setup: Cliff Notes: AI Goes From Strength to Strength may explain attention, but entry quality still depends on timing, liquidity and risk/reward.
- Watch confirmation: a clean move usually appears across related markets, not only in one isolated instrument.
- Control exposure: if volatility expands, smaller position sizing can be more professional than chasing the headline.
Next Move Markets treats this kind of brief as a starting point for preparation: identify the driver, map the scenarios, then wait for the market to prove which path is actually being priced.
Next Move Markets desk view
For active traders, this brief should be read through the lens of global markets rather than as a standalone headline. The key question is whether the theme behind Cliff Notes: AI Goes From Strength to Strength can influence positioning beyond the first reaction. That means watching liquidity, macro data, sentiment, positioning and cross-asset confirmation together, not in isolation.
A richer trading read comes from separating the catalyst from confirmation. The catalyst explains why markets are paying attention; confirmation comes from price action, liquidity and cross-asset behavior after the headline is digested. If those signals do not align, traders should treat the move as fragile and keep risk tighter.
What traders should watch next
- Whether price action confirms the headline after the first reaction has passed.
- How related markets respond, because isolated moves are easier to reverse.
- Any follow-up data or official comment that changes the original market assumption.
- Volatility and liquidity conditions, which should guide risk size before direction.
Risk context
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
Scenario map
The base case is that traders keep this theme on the radar while waiting for confirmation from liquidity, macro data, sentiment, positioning and cross-asset confirmation. A stronger continuation scenario requires follow-through after the first reaction, preferably with related assets moving in the same direction. A failure scenario develops if the headline is quickly absorbed, volatility fades and price returns inside the previous range.
For global markets, the most useful approach is to compare the article theme with live market behavior. If the market confirms the narrative, pullbacks can become more constructive. If the market rejects it, the headline becomes background noise rather than a trading driver.
Execution discipline
- Define the level first: traders should know where the idea is invalidated before thinking about upside or downside.
- Separate news from setup: Cliff Notes: AI Goes From Strength to Strength may explain attention, but entry quality still depends on timing, liquidity and risk/reward.
- Watch confirmation: a clean move usually appears across related markets, not only in one isolated instrument.
- Control exposure: if volatility expands, smaller position sizing can be more professional than chasing the headline.
Next Move Markets treats this kind of brief as a starting point for preparation: identify the driver, map the scenarios, then wait for the market to prove which path is actually being priced.
Next Move Markets desk view
For active traders, this brief should be read through the lens of global markets rather than as a standalone headline. The key question is whether the theme behind Cliff Notes: AI Goes From Strength to Strength can influence positioning beyond the first reaction. That means watching liquidity, macro data, sentiment, positioning and cross-asset confirmation together, not in isolation.
A richer trading read comes from separating the catalyst from confirmation. The catalyst explains why markets are paying attention; confirmation comes from price action, liquidity and cross-asset behavior after the headline is digested. If those signals do not align, traders should treat the move as fragile and keep risk tighter.
What traders should watch next
- Whether price action confirms the headline after the first reaction has passed.
- How related markets respond, because isolated moves are easier to reverse.
- Any follow-up data or official comment that changes the original market assumption.
- Volatility and liquidity conditions, which should guide risk size before direction.
Risk context
This article is a market-intelligence brief, not a trade recommendation. Before acting on the theme, traders should define invalidation, position size and the time horizon of the setup. The same headline can support a short-term reaction and still fail as a multi-session trend if liquidity, policy expectations or broader sentiment move the other way.
Scenario map
The base case is that traders keep this theme on the radar while waiting for confirmation from liquidity, macro data, sentiment, positioning and cross-asset confirmation. A stronger continuation scenario requires follow-through after the first reaction, preferably with related assets moving in the same direction. A failure scenario develops if the headline is quickly absorbed, volatility fades and price returns inside the previous range.
For global markets, the most useful approach is to compare the article theme with live market behavior. If the market confirms the narrative, pullbacks can become more constructive. If the market rejects it, the headline becomes background noise rather than a trading driver.
Execution discipline
- Define the level first: traders should know where the idea is invalidated before thinking about upside or downside.
- Separate news from setup: Cliff Notes: AI Goes From Strength to Strength may explain attention, but entry quality still depends on timing, liquidity and risk/reward.
- Watch confirmation: a clean move usually appears across related markets, not only in one isolated instrument.
- Control exposure: if volatility expands, smaller position sizing can be more professional than chasing the headline.
Next Move Markets treats this kind of brief as a starting point for preparation: identify the driver, map the scenarios, then wait for the market to prove which path is actually being priced.
