10.12: National cabinet to meet as ASX set to have a red day
The ASX looks set to open lower on Monday, with SPI futures indicating a fall of about 0.7% to 0.8% after another weak lead from Wall Street. The S&P/ASX 200 closed Friday down 9.4 points, or 0.11%, as the market ended the week cautiously.
Even so, the benchmark still gained 87 points over the week to finish at 8,516, breaking a three-week losing run. Broader conditions remain weak, however, with the market down 7.42% for March and 2.27% for the first quarter as Middle East tensions escalated, oil prices climbed and the RBA delivered another rate increase.
Volatility linked to energy markets continues to weigh on sentiment. Brent crude remains above US$110 a barrel after reaching as high as US$119.50 this month amid disruptions to major shipping routes, including the Strait of Hormuz.
By sector, Materials led gains last week with a rise of 4.57%, followed by Utilities, up 3.36%. Information Technology was the weakest performer, falling 4.77%. Among individual stocks, Pilbara Minerals and Liontown Resources each jumped more than 21%, while Amplitude Energy dropped 41.76%.
Attention this week will turn to the release of the RBA’s latest meeting minutes, which may offer further clues on the path for interest rates. The central bank raised the cash rate by 25 basis points to 4.10% earlier this month, and markets are still factoring in the likelihood of further tightening.
Australia to avoid recession
Federal Treasurer Jim Chalmers says Australia is expected to avoid a recession, but has warned inflation is likely to rise beyond earlier forecasts as prices continue climbing in response to conflict in the Middle East.
Chalmers said Australia would not be shielded from global price pressures caused by the war in Iran, while seeking to reassure households that the economy was still expected to keep growing.
“The economy will continue to grow, but it will take a quite a sizable hit from what’s happening in the Middle East,” Dr Chalmers said. “This war in the Middle East is having extreme consequences for the global economy, and we won’t be spared the fallout from that. And even when this war ends, the consequences will linger for longer.”
He said Treasury’s earlier inflation modelling now appeared too conservative, warning that a prolonged conflict would place further upward pressure on prices.
“We released some modeling which said that, instead of inflation peaking in the high threes, it might be more like the high fours or the low fives. That does look conservative.”
“Because of this war in the Middle East, inflation will be higher for longer. There will be a hit to growth. We hope to avoid some of those, harsher consequences.”
Leaders to model worst-case fuel crisis scenarios
Prime Minister Anthony Albanese, Energy Minister Chris Bowen and state premiers are set to “war game” worst-case scenarios as Australia’s fuel crisis intensifies, including how to avoid extreme measures such as fuel rationing.
The discussions come as the federal government convenes national cabinet to coordinate a response to ongoing supply disruptions linked to the Middle East conflict, with leaders considering both voluntary measures—such as reducing fuel use—and thresholds for stricter interventions if shortages worsen.
Authorities are focused on maintaining supply and preventing panic buying, while preparing contingency plans should global oil flows continue to be disrupted. Although rationing remains a last resort, it is being considered as part of broader emergency planning.
The crisis has exposed Australia’s vulnerability to global fuel shocks, prompting calls for greater transparency, clearer national coordination and longer-term strategies to strengthen fuel security.