Week commencing 1 June 2026

Wall Street eyes fresh highs; ASX 200 posts weekly gain

United States (US) equity markets are set to finish the week at fresh record highs, supported by strong gains in technology stocks and optimism around a potential 60‑day ceasefire extension between the US and Iran.

As May draws to a close, the S&P 500 is up a robust 4.92% for the month, extending April’s 10.42% advance. The tech‑heavy Nasdaq 100 has surged 10.10%, building on its impressive 15.15% gain in April. The Dow Jones has added around 1021 points (+2.06%), following its 3310‑point surge the previous month.

Closer to home, ASX 200 is on track for a second consecutive small weekly gain after another volatile week of trading. While the local market received support from the rally on Wall Street and a cooler‑than‑expected Australian inflation report, uncertainties persist. These include soft consumer confidence, a softening housing market and the lingering impact of the Reserve Bank of Australia’s (RBA) three rate hikes this year.

The week that was: highlights

• US gross domestic product (GDP) growth for the first quarter (Q1) was revised lower to 1.6% annualised from 2.0%, signalling a slowdown in momentum
• April core personal consumption expenditures (PCE) inflation came in at 0.2% month‑on‑month (MoM), keeping the year‑on‑year (YoY) rate at 3.3%, in line with expectations
• Initial jobless claims for the week ending 23 May rose by 5000 to 215,000
• The Conference Board consumer confidence index eased to 93.1 in May, though it remained above expectations of 92
• China’s (CN) foreign direct investment contracted 10.3% year‑to‑date in April, a steeper decline than the 6.8% forecast
• Japan’s (JP) industrial production rose 0.8% in April, while retail sales jumped 2.1% YoY
• Eurozone economic sentiment rose to 93.5 in May from 93.2
• Australian headline consumer price index (CPI) eased to 4.2% YoY in April, below the 4.4% consensus, while the RBA’s preferred trimmed mean rose to 3.4% YoY.
• The Reserve Bank of New Zealand (RBNZ) held its official cash rate (OCR) at 2.25% and maintained a hawkish tone
• West Texas Intermediate (WTI) crude oil fell 9.00% to $87.90
• The US dollar index (DXY) fell 0.31% to 99.00
• Bitcoin fell 4.21% to $73,736
• Gold fell 0.33% to $4494
• The volatility index (VIX) fell to 15.73 from 16.71 the previous week.

Key dates for the week ahead

Australia & New Zealand

• AU – Building permits and company profits: Tuesday, 2 June at 11.30am AEST
• AU – Q1 GDP: Wednesday, 3 June at 11.30am AEST
• AU – Balance of trade: Thursday, 4 June at 11.30am AEST

China & Japan

• CN – RatingDog manufacturing purchasing managers' index (PMI): Monday, 1 June at 11.45am AEST
• CN – RatingDog services PMI: Wednesday, 3 June at 11.45am AEST

United States

• US – ISM manufacturing PMI and employment: Tuesday, 2 June at 12.00am AEST
• US – Job Openings and Labor Turnover Survey (JOLTS) job openings: Wednesday, 3 June at 12.00am AEST
• US – ADP employment change: Wednesday, 3 June at 10.15pm AEST
• US – ISM services PMI and factory orders: Thursday, 4 June at 12.00am AEST
• US – Initial jobless claims: Thursday, 4 June at 10.30pm AEST
• US – Non‑farm payrolls: Friday, 5 June at 10.30pm AEST

Europe & United Kingdom

• EA – Unemployment rate: Monday, 1 June at 7.00pm AEST
• EA – Inflation rate flash: Tuesday, 2 June at 7.00pm AEST
• EA – Retail sales: Thursday, 4 June at 7.00pm AEST
• UK – Halifax house price index: Friday, 5 June at 4.00pm AEST

Key events for the week ahead

CN: RatingDog manufacturing PMI

Date: Monday, 1 June at 11.45am AEST

Last month’s RatingDog manufacturing PMI climbed to 52.2 in April, its strongest reading since December 2020 and well above expectations. The survey showed broad‑based gains in output and new orders, with input price pressures also picking up.

Monday’s flash reading for May will provide a gauge of whether China’s manufacturing momentum is holding or beginning to fade. Consensus expectations are for a decline to 51.3.

A result in line with expectations would support the view that the Chinese economy is stabilising, while a print below 50 would raise fresh concerns about the durability of the recovery and the effectiveness of recent policy support.

China RatingDog manufacturing PMI chart

EA: Inflation rate flash

Date: Tuesday, 2 June at 7.00pm AEST

In April, eurozone headline inflation rose to 3.0% YoY from 2.6% in March, surprising to the upside and marking the highest reading in several months. Core inflation, which excludes energy, food, alcohol and tobacco, eased slightly to 2.2% – the lowest rate since the Russian invasion of Ukraine.

Tuesday’s reading will be closely watched for signs of whether the recent energy‑driven increase is broadening across the economy. Markets expect headline inflation to rise further to around 3.3%, with the core measure also forecast to tick up to 2.4%.

The European rates market is currently pricing around 60 basis points (bp) of European Central Bank (ECB) tightening for 2026, with the first 25 bp move expected in June, followed by another 25 bp increase in October.

Euro area core inflation chart

AU: Q1 GDP

Date: Wednesday, 3 June at 11.30am AEST

In the fourth quarter (Q4) of 2025, the Australian economy posted a solid 0.8% quarter‑on‑quarter (QoQ) gain, accelerating from 0.5% in the prior period and lifting the annual growth rate to 2.6% – its strongest pace in nearly three years.

Digging into the details, per capita GDP rose 0.4% for the quarter and 0.9% over the year, while the household saving‑to‑income ratio climbed to 6.9%, the highest level since September 2022. This reflected gross disposable income growth outpacing subdued household consumption, which rose a modest 0.3% QoQ.

Wednesday’s Q1 2026 GDP release is expected to show a 0.5% QoQ increase, which would leave the annual growth rate unchanged at 2.6%. A significantly softer print – below 0.3% – would underscore the cumulative impact of higher interest rates on household spending and confidence, and reinforce the view that domestic demand remains under pressure. Such a result would also add to the growing market conviction that the Reserve Bank of Australia (RBA) has completed its rate‑hiking cycle.

Conversely, an upside surprise above 0.7% would signal that the economy retains more underlying resilience than many currently expect and leave the door open for additional RBA rate hikes.

Markets will pay close attention to the breakdown – particularly the savings rate, household consumption and per capita measures – for further insight into domestic economic conditions.

The interest rate market is currently pricing around 2 bp of tightening for the RBA’s June meeting, with a cumulative 20 bp of hikes expected over the remainder of 2026.

Australia GDP annual growth rate chart

US: Non‑farm payrolls

Date: Friday, 5 June at 10.30pm AEST

Last month, US non‑farm payrolls rose 115,000 in April, following an upwardly revised 185,000 gain in March and above the 62,000 consensus forecast. The unemployment rate held steady at 4.3%, while average hourly earnings rose 0.3% MoM, keeping the annual pace around 3.7%.

After recent volatility in labour market data and the divided tone at the late‑April Federal Open Market Committee (FOMC) meeting, Friday’s May jobs report will be closely watched for further insight into labour market conditions. Consensus expects an increase of around 93,000 jobs, with the unemployment rate forecast to remain at 4.3%.

A stronger‑than‑expected result would reinforce the resilience of the US labour market, while a weaker outcome or rising unemployment would raise concerns against the backdrop of higher energy prices and persistent inflation.

The US rates market is currently pricing around 15 bp of tightening by December, with a full 25 bp rate hike priced for March 2027.

US unemployment rate chart