Softer CPI and Tariff Pause Lift Market Mood

• Sentiment remained positive overnight, supported by the recent China–US tariff truce and a softer-than-expected US CPI print.
• April CPI rose just 0.2% (vs. 0.3% expected), with annual inflation easing to 2.3% (from 2.4%). Core CPI also undershot at 0.2% (vs. 0.3% expected), helping ease concerns about any tariff-driven inflation rebound.
• US Treasuries were little changed, retracing initial gains after the CPI release — the 10-year yield held steady at 4.47%.
• Locally, sentiment indicators painted a mixed picture. The Westpac–MI Consumer Sentiment index rose 2.2% in May to 92.1, a modest rebound from April’s 6% fall, though it remains well in pessimistic territory.
• The NAB Business Survey showed a slight softening in conditions during April, largely driven by a dip in profitability, while confidence held steady.