Westpac Market Outlook

This report outlines a volatile global outlook driven by renewed Middle Eastern conflict and its impact on inflation and commodity prices. It projects further interest rate hikes for the RBA and analyzes structural economic challenges in the US, China, and the UK.

Key Takeaways

• 1.Middle East geopolitical risks have returned to a combustible state, affecting global energy prices and market sentiment despite an earlier ceasefire memorandum.
• 2.The RBA is expected to deliver two additional rate hikes in 2026 due to inflation remaining above target, with policy easing unlikely before late 2027.
• 3.China faces an industrial expansion contrast with a weak consumer sector, necessitating further proactive stimulus to sustain 4.5% GDP growth.

Table of Contents

• Australia
• The World
• Summary forecast tables
• EXECUTIVE SUMMARY
• FINANCIAL MARKETS
• AUSTRALIAN ECONOMY
• COMMODITIES
• GLOBAL FX
• NEW ZEALAND
• China’s greatest opportunity
• UNITED STATES
• ASIA
• EUROPE & UK

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