Josh Gilbert, market analyst at eToro, shares his three things to watch in Australia in the coming days.
AU unemployment and consumer sentiment
Despite trade tensions dominating headlines, this week’s labour force and NAB consumer sentiment data will serve as critical inputs for the Reserve Bank of Australia (RBA) ahead of its upcoming interest rate decision. Markets are fully pricing in a rate cut.
A net gain of 25,000 jobs is anticipated, with unemployment expected to hold steady at 4.1%, although recent figures have been volatile. March saw a solid rebound in employment after a significant February slump. While the RBA will be encouraged by the lack of sharp unemployment spikes, it likely seeks further signs of a cooling labour market.
Consumer sentiment is expected to show improvement. Roy Morgan and ANZ Bank’s pre-election data indicated a 4.1-point rise in confidence to 87.5. NAB’s previous findings suggested tariff uncertainty had dampened household confidence, but fresh data may point to stabilising spending amid easing global tensions and post-election clarity.
Xero full-year results
ASX-listed Xero will report its full-year results this week, with investor focus on subscriber growth and international performance. Recent domestic price hikes—focused on premium tiers—highlight pricing power while keeping entry-level products accessible to support user growth.
Despite a strong product offering, Xero faces stiff competition from players such as Oracle, Intuit, and Sage. North American growth has lagged despite significant investment. First-half results revealed underwhelming international revenue, with slowing subscriber growth particularly evident in the US, though the UK remained a bright spot.
If Xero can effectively advance its global strategy, even modest market share gains could deliver strong growth. Its robust balance sheet also supports the potential for growth through acquisition.
US inflation
The US Federal Reserve held rates steady last week, citing inflation risks and labour market sensitivity. Uncertainty around tariffs now clouds the inflation outlook—whether these are temporary inflationary pressures or longer-lasting.
Following weekend trade talks in Geneva, attention turns to US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, with an update expected Monday morning (US time). A provisional easing of tariffs, as suggested by Greer, would likely buoy markets.
Recession concerns persist, particularly after a 0.3% GDP contraction in Q1. Yet, labour markets remain firm with 177,000 jobs added in April. This week’s US consumer price index (CPI) data—headline at 2.4%, core at 2.8%—will shed light on how tariffs are impacting inflation. Key attention will fall on tariff-exposed sectors like apparel.