Josh Gilbert, Market Analyst at eToro, shares his three things to watch in Australia in the coming days.
RBA minutes
The RBA’s meeting minutes from this month’s rate cut call will arrive on Tuesday, providing a deeper insight into the RBA’s current outlook amid global economic uncertainty.
We’ll likely see a bit of a “wait and see” sentiment in the minutes, along with that same hawkish tone we’ve been hearing from RBA chair Michelle Bullock for months now. Of course, that dreaded word - tariffs - will continue to hang over future decisions, but Bullock has made it clear time and time again that the central bank’s focus “remains on our dual mandate for price stability and full employment”.
As I mentioned last week, following the latest CPI reading, the RBA remains cautious about inflation, and we can clearly see why. While the inflation figures aren’t a reason to panic, they do mean that a rate cut in July is certainly not nailed on. Last week’s rate cut, in which the cash rate decreased to 3.85%, doesn’t necessarily set the stage for back-to-back cuts.
Regardless, with the inflation rate at 2.4%, it is still sitting comfortably within the Reserve Bank’s target band, meaning the market is still pricing in three further rate cuts before year’s end – just don’t expect a guaranteed back-to-back cut when the next call arrives in July.
AU GDP growth
This Wednesday, we’ll be getting our hands on the latest QoQ Australian GDP results. Australia’s economy likely grew by around 0.5% in the March quarter, slightly slower than the 0.6% pace recorded for the December quarter of 2024. Household spending appears to have stalled after a strong finish to last year’s holiday season, even as residential construction likely picked up. That means overall growth is barely outpacing population gains, leaving output per person essentially flat.
This lukewarm expansion sets a cautious tone for markets. Consumer-facing stocks on the ASX could feel the pinch from cautious consumers, while housing-related shares might find support from positives in construction.
A softer GDP result may also keep the Australian dollar on the back foot, as it reinforces expectations of further RBA rate cuts later in the year. Tariffs and global trade tensions remain wildcards for future quarters, but for now, it’s a story of subdued growth at home and likely more rate relief ahead.
Lululemon earnings
Lululemon has had a turbulent couple of years in markets, with its shares seeing plenty of volatility alongside a fair amount of controversy surrounding the brand. However, its Q4 earnings report provided some renewed excitement around the Canadian activewear icon, with a global base of exceptionally loyal consumers keeping the apparel brand in an enviable position.
With its Q1 earnings report expected to be delivered on Thursday in Canada, the challenge for the brand now is that it is being impacted by US tariffs, particularly those levied on countries where many of its products are manufactured. Trump’s tariffs, particularly the 46% and 34% tariffs on Vietnam and China, respectively, have impacted the brand’s supply chain and are estimated to reduce Lululemon's gross margins by 7.2 percentage points.
But between as-of-yet unresolved Supreme Court action against the tariffs, and the growing investor sentiment ‘TACO’ - or ‘Trump Always Chickens Out’, a belief shaped by past episodes where hardline trade threats were ultimately dialled down or delayed - these otherwise concerning profit projections may not actually dissuade investors, even with the risk of uncertainty.
The market expects Lululemon’s sales growth to remain solid, likely coming in at the upper end of its 6–7% forecast, thanks to stronger product offerings. China remains a key growth driver for the business, while sales in the Americas are lagging. The options market currently implies an almost 9% move either way following its earnings, so some fresh volatility is ahead for Lululemon shareholders.