May 2026 data from Japan.

Household spending:

+3.7% m/m

• expected +1.4%, prior +1.6%

-0.4% y/y

• expected -2.5%, prior -0.5%

Wages:

Average Cash Earnings +3.2% y/y

• expected +3.4%, prior +3.5%)

Same Sample Base Cash Earnings +2.9%

• prior +2.9%

Overtime Pay +2.9% y/y

• prior +4.2%

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I'll have more to come on this separately.

Stay informed with FxPro’s weekly update and stay ahead of what’s shaping the markets. Markets are heading into another important week of economic data, with inflation, manufacturing activity and the US labour market all set to shape expectations for interest rates and global growth. 🌍 Wednesday begins with the latest Eurozone Flash CPI report. Inflation is expected to remain elevated at 3.2%, raising fresh questions over whether the European Central Bank's recent rate hike will be enough to bring price pressures under control. 🇪🇺 Attention then shifts to the US with the ISM Manufacturing PMI. The previous reading came in at 54.0, but ongoing tensions between the US and Iran continue to push up manufacturing costs and could weigh on business activity. 🏭 Thursday brings the closely watched US Non-Farm Payrolls report, released a day earlier than usual ahead of the 4 July public holiday. The previous report showed 172,000 new jobs added, while unemployment stood at 4.3%, making this a key release for expectations around future Federal Reserve policy. 📊 With inflation, manufacturing and employment all under the spotlight, currencies, indices and commodities could see increased volatility throughout the week. 👀 🔔 Like, share, and subscribe for more weekly updates from FxPro! 👉 Register at https://www.fxpro.com and start trading like a pro! 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing money. Past performance is not a reliable indicator of future results. #FxPro #WeeklyNews #MarketUpdate #shorts

The near-stabilisation of the composite at 49.8 is unlikely to shift RBA expectations materially on its own, but the confidence reading is a red flag: sentiment at its weakest since the pandemic outside of March 2020 suggests the private sector is bracing for deterioration rather than recovery, which has implications for forward consumer spending and business investment. The continued fall in new orders for a fourth consecutive month points to demand weakness that output stabilisation alone cannot mask, and the divergence between hiring and order intake is a classic late-cycle signal that employment gains may prove short-lived. On the inflation side, the easing in both input and output price pressures will be welcome at the RBA, particularly with fuel and transport costs cited as the primary remaining drivers, meaning further relief via lower oil prices and Hormuz normalisation could accelerate the disinflation trend. AUD is modestly exposed to the downside on any read that reinforces a weakening domestic growth pulse.

Australia's flash composite PMI rose to 49.8 in June from 48.7, nearing stabilisation, but business confidence hit its lowest since the COVID-19 pandemic as new orders continued to fall.

Summary:

• The S&P Global Flash Australia Composite PMI Output Index rose to 49.8 in June from 48.7 in May, remaining fractionally below the 50.0 no-change mark, according to S&P Global
• New orders fell solidly for a fourth consecutive month, with respondents citing market uncertainty as the primary cause; new export orders also declined at the end of the second quarter, per S&P Global
• Business confidence dropped to its lowest level since March 2020 and, excluding that pandemic-affected month, to the weakest reading since the survey series began just over a decade ago, according to S&P Global
• Employment rose modestly in both manufacturing and services after a rare decline in May, as firms expanded capacity ahead of anticipated future projects, per S&P Global
• Input cost inflation eased for the second consecutive month to its lowest since March, with higher fuel and transportation costs the most commonly cited pressures; output price inflation also slowed to its weakest since February, according to S&P Global
• S&P Global Economics Director Andrew Harker said the data painted a mixed picture, noting that lower oil prices following the US-Iran MOU and any improvement in Hormuz shipping flows could provide further relief to supply-chain disruption still affecting manufacturers, per the release

Australian business activity edged back toward stability in June but remained in contraction territory, with a collapse in confidence to near-record lows and a persistent decline in new orders clouding what might otherwise have been a mildly encouraging headline reading.

The S&P Global Flash Australia Composite PMI Output Index rose to 49.8 in June from 48.7 in May, leaving it fractionally below the 50.0 threshold that separates expansion from contraction. The improvement was driven largely by the services sector, where business activity broadly stabilised after a slight reduction the prior month. Manufacturing output continued to decline, though the pace of contraction was little changed from May.

The more troubling signal came from the demand side. New orders fell solidly again in June, extending a run of continuous declines that has now stretched to four months since March. Firms pointed to market uncertainty as the dominant factor weighing on new business, and the weakness was not confined to the domestic economy, with new export orders also falling at the end of the second quarter.

Business confidence deteriorated sharply, dropping to its lowest level since March 2020. Stripping out that pandemic-distorted month, sentiment was the weakest the survey has recorded in its decade-long history. The services sector drove the confidence decline, though manufacturers reported a modest improvement in their own outlook, with optimists pointing to expansion plans and hopes for a pickup in orders.

Despite falling new business, firms added staff in June, reversing a rare decline recorded in May. Modest hiring was seen across both manufacturing and services as companies sought to build capacity ahead of anticipated future projects. The combination of rising headcount and shrinking order books allowed businesses to work through backlogs at the fastest rate in more than two and a half years.

On the inflation front, the data provided some relief. Input cost pressures eased for the second month running and were at their least intense since March, though fuel and transportation costs remained the most commonly cited source of upward pressure. Manufacturers noted that some suppliers had consolidated deliveries to cut shipping costs, contributing to a further lengthening of delivery times. Output price inflation also slowed, reaching its weakest pace since February, with both sectors raising charges at a more modest rate.

S&P Global Economics Director Andrew Harker described the private sector as standing at a crossroads, noting that the drop in oil prices following the US-Iran cessation of hostilities memorandum and any recovery in shipping flows through the Strait of Hormuz could provide further relief to the supply-chain disruption still affecting manufacturers. He said the news and data flow in the coming weeks would be key to assessing the future direction of the Australian economy.

Final June PMI readings are scheduled for publication on July 1 for manufacturing and July 3 for services and the composite.

Intraday bias in EUR/USD stays neutral at this point. Risk will stay on the downside as long as 1.1685 resistance holds. Break of 1.1499 will resume the fall from 1.1848 towards 1.1408 support. However, firm break of 1.1685 will argue that fall from 1.1848 has completed, and bring stronger rally. In the bigger picture, the […]

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AUD/USD falls notably today but stays above 0.7076 support. Intraday bias stays neutral first. On the downside, firm break of 0.7076 will resume the decline from 0.7277. Next target is 100% projection of 0.7277 to 0.7076 from 0.7200 at 0.6999. On the upside, above 0.7200 will bring stronger rebound back to retest 0.7277 high. In […]

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