Australian Activity Steadies Ahead of Crucial Inflation Print

• June flash PMI data pointed to a steadying in Australian business conditions following a turbulent stretch tied to the Iran conflict. Manufacturing and services both hovered just below the 50 mark – neither expanding nor contracting, but stabilising.
• The detail told a more cautious story. New orders have fallen every month since March, though input price pressures softening for a second straight month offered some relief.
• The May CPI print lands today – consensus sits at 4.3% headline, with trimmed mean at 0.3% for the month and 3.5% annually. Cheaper fuel has done the heavy lifting, keeping Q2 inflation well below the RBA’s May SoMP forecasts.
• Markets are finely balanced heading into the number – a 30% chance of an August hike is priced, climbing to 60% by November. A surprise either way could meaningfully shift that dial.