The US Government Shutdown Shows Promise Of Coming To An End As RBA’s Hauser Signals Steady Policy For The Future

• Risk appetite improved overnight, helped by signs the US government could soon reopen after eight Democrat senators sided with Republicans to advance a funding bill. That’s a constructive step and should help ensure US data releases remain on schedule.
• RBA Deputy Governor Hauser noted in a speech yesterday that capacity utilisation remains high and potential growth constrained, which isn’t the backdrop for a near-term rate cut.
• His tone leaned cautious, suggesting any easing would need a clear downside surprise relative to the RBA’s latest SoMP outlook. While he didn’t rule out future cuts, the message was that policy settings stay put for now.
• Markets trimmed expectations for easing in mid-2026, with pricing for the May meeting falling from 16bps of cuts to about 12bps following the speech.
• Locally, today’s focus is on Westpac Consumer Confidence and NAB Business Confidence and Conditions.