Australia Shows Signs of Cooling, Not Cracking

• Momentum in the housing market continued to fade through May, with national dwelling values flat on the month. The softer result was largely driven by the east coast capitals, where Sydney (-0.9%) and Melbourne (-0.8%) again weighed on the broader index.

• The labour market painted a more constructive picture, with job advertisements rising 1.8% in May. The improvement was broad-based, with employers increasing hiring intentions across hospitality, education and construction sectors.

• On the inflation front, recent signs of easing price pressures continued, with the Melbourne Institute Inflation Gauge falling 0.3% over May. The decline follows several months of more moderate inflation outcomes.

• Taken together with the latest CPI data showing annual inflation slowing from 4.6% to 4.2%, the trend suggests inflation is continuing to move in the right direction, even if progress remains gradual.

• Offshore, the US economy continues to show surprising resilience. The ISM Manufacturing Index rose to 54.0, its highest level in four years, supported by stronger new orders, export demand and order backlogs.