A Weakening Consumer

• Oil prices remain elevated, with Brent at $88/bbl and WTI at $82/bbl, as the US stays committed to its policy of economic pressure on Iran alongside the naval blockade of the Strait.
• US data disappointed, with the consumer sentiment index sliding to 51.0 in August from 55.2 in July, while retail sales fell 0.6% in July, short of market expectations of a 0.1% increase, the two moving together to signal a weakening consumer.
• Domestically, the value of new housing lending declined 5.2% in Q2 2026 amid a broader downturn driven by higher interest rates, tax policy changes and the uncertainty created by the Middle East conflict, with the weakness led by a 10.2% quarterly fall in investor lending.
• Looking ahead, consumer confidence, the wage price index and a speech from RBA Deputy Governor Hauser later this week may offer further commentary on the rate path, with the RBA still committed to hiking if upside risks to inflation materialise.