NAB and Westpac Surveys Show Sharp Pullback

• RBA Deputy Governor Hauser spoke overnight in New York, maintaining a tightening bias and noting there is still limited confidence current rates are restrictive enough to return inflation to target.
• The tone was consistent with the Board’s recent stance, with no meaningful shift in market pricing, reinforcing that policy is likely to remain data dependent from here.
• Business sentiment deteriorated sharply, with NAB confidence falling to -29 in March, marking one of the largest monthly declines on record and the weakest level since April 2020, driven by the recent oil shock and global uncertainty.
• Despite the collapse in confidence, business conditions held steady at 6, suggesting underlying activity has not weakened to the same extent as sentiment.
• Consumer sentiment also dropped materially, with the Westpac index falling 12.5% to 80.1, a 2.5-year low, as higher fuel prices from the Iran conflict and the recent 25bp rate hike weighed on households.