Global Markets Steady as US Consumer Holds Up

• Australian yields declined across the curve overnight, with the local market taking direction from a modest flattening in US Treasuries. With little domestic data releases today, offshore rates, oil and any US–China headlines are likely to remain key drivers of any moves.
• CBA Household Spending data softened in April, falling 1.2% m/m after a 2.9% rise in March. Excluding transport, spending was still down 0.2%, driven by reduced spending on travel, pointing to a softer month for household demand beyond petrol price swings.
• US retail sales rose 0.5% m/m in April, in line with expectations but slower than March’s 1.7% gain. The control group rose 0.5% and prior months were revised higher, suggesting the consumer remains resilient enough to keep the Fed cautious.
• US inflation risks remain on watch, with recent CPI and PPI data firm and import prices excluding petroleum up 0.7%. While energy and shelter effects explain part of the pressure, markets are still sensitive to signs of broader goods inflation.
• The first day of the Trump–Xi summit produced little immediate market reaction, however concerns around both Taiwan and the Strait of Hormuz remain key geopolitical risk points for markets.