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Business confidence weakens as cost pressures and uncertainty persist

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Forex Market 

Business confidence weakens as cost pressures and uncertainty persist

Business conditions remained subdued in the June quarter, with manufacturers reporting ongoing pressure from elevated input costs, softer demand conditions and heightened uncertainty around the economic outlook. Notes that while activity levels have held up better than expected in some sectors, confidence has deteriorated as businesses grapple with higher energy costs, labour shortages and weaker consumer demand. Export-oriented firms continue to face challenges from volatile global markets, while investment intentions have softened amid uncertainty over future growth prospects.
Forward-looking indicators suggest businesses remain cautious despite some signs of stabilisation in financial markets. Notes that easing geopolitical tensions have supported risk sentiment and reduced pressure on energy prices, providing some relief for firms facing cost headwinds. However, concerns about inflation, interest rate settings and slowing economic activity continue to weigh on confidence. Manufacturers expect conditions to remain challenging over the second half of the year, with profitability and hiring intentions likely to remain under pressure unless demand strengthens and cost growth moderates.

General Market

Wall Street

  • Dow Jones: +1.86% to 51,676
  • S&P 500: +1.65% to 7,554
  • Nasdaq: -0.06% to 30,462
Asia-Pacific
  • ASX 200: -0.44% to 8,886
  • Nikkei: +0.31% to 69,857
  • Shanghai Composite: +0.09% to 4,724
Europe
  • FTSE: +0.14% to 10,436
  • DAX: +1.05% to 24,894
  • CAC: +0.38% to 8,383

Headlines to Watch

United States

  • Housing Starts + Building Permits → signals strength of housing sector
  • Labour market resilience remains key for Fed rate outlook
  • Inflation trajectory continues to drive policy expectations
  • Fed meeting and forward guidance remain market focus

Europe

  • German ZEW sentiment → early signal on growth momentum
  • Eurozone confidence indicators watched for recovery trends
  • ECB rate path tied to inflation and economic activity

Asia-Pacific

  • BoJ rate decision → key driver for JPY and global yields
  • RBA decision → AUD volatility and policy outlook
  • NZ Current Account → external sector health
  • China activity data continues to influence regional sentiment

Global / Geopolitics

  • Middle East developments impacting oil and risk sentiment
  • Global bond yields reacting to central bank policy divergence
  • Trade and supply-chain developments remain inflation risks
  • Growth versus inflation balance remains the dominant macro theme
Currency Pair Mid-market Rate
AUD/USD 0.7064
AUD/NZD 1.2156
AUD/JPY 113.18
AUD/CNY 4.7759
AUD/EUR 0.6096
AUD/GBP 0.5269
AUD/HKD 5.5324

 

 

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