Australia and New Zealand: Weekly Prospects

Research evidence excerpt

Australia and New Zealand: Weekly Prospects

J P M O R G A N Economic Research

04 August 2026

Australia and New Zealand:

Weekly Prospects

• Australia’s June household spending data are in focus this week. Fuel prices Australian and New Zealand Interest

fell by roughly 10% through June, which should mechanically weigh on Rate Strategy

nominal household spending via the transport component and help unwind Ben K Jarman

some of May’s outsized strength. Beyond this fuel-related distortion, (61-2) 9003-7982

consumer sentiment remained subdued and households appeared cautious ben.k.jarman@jpmorgan.com

amid the prospect of further RBA tightening, conditions that are likely to Tom Kennedy

restrain discretionary outlays and potentially offset World Cup-related (61-2) 9003-7981

recreation spending. Overall, we look for a modest decline in June following tom.kennedy@jpmorgan.com

May’s sharp rise. Looking ahead, we see limited scope for renewed upside in Tom Ryan

(61-2) 9003-7632

household spending as the lagged effects of earlier policy tightening continue thomas.f.ryan@jpmorgan.com

to flow through. In addition, the drag from the housing slowdown should build J.P. Morgan Securities Australia Limited

through 2H26, with discretionary goods categories the most exposed.

• Last week Australia's 2Q CPI came in softer than already downwardly-revised

expectations, crystallizing a material undershoot versus the RBA's forecast

(1.4%q/q). Headline inflation rose 0.6%q/q, below both JPM and consensus

expectations, while trimmed mean also undershot at 0.8%q/q. While we expect

the RBA to retain a hiking bias so long as spot inflation remains elevated, the

data support our view that the hiking cycle is over and the next move is down

in 2027.