House prices ease in May

• National house price data released this morning, with capital city values down 0.1% in May as rising interest rates, softer sentiment amid the offshore conflict, and tax changes weigh on results.
• A big week for data lies ahead, with Q1 GDP forecast at 0.5% for the quarter and 2.6% over the year. The Middle East conflict only began in February, so its headwinds are only partly captured; instead attention turns to private capex on data centres, which is supporting activity even as a corresponding rise in import volumes offsets some of that contribution.
• The RBA’s Hauser speaks later this week in a fireside chat on the health of the Australian economy, with scope to shift the macro outlook and move markets, while Governor Bullock testifies on the federal budget before the Senate.
• Over the weekend focus stayed on the prospect of reopening the Strait of Hormuz, though nothing is confirmed and any move would amount only to a 60 day ceasefire extension, a delay rather than a full resolution. Even so, oil prices continued to ease and bond markets firmed, with both Australian and US yields declining as expectations for further rate hikes moderate.