Monthly Market Commentary
As at 30 April 2026
Economic review
Australia
Inflation rises on higher energy prices
Australian Consumer Price Index (CPI) rose 1.1% MoM in March, driven largely by a 9.2% jump in transport costs mainly due to higher fuel prices. Annual CPI increased to 4.6%, up from 3.7%. Trimmed mean inflation was steadier, rising 0.3% MoM. Market pricing for rate hikes was broadly unchanged after the release, with expectations still for two hikes before 2026 ends.
Australian household spending held steady at 4.6% YoY in February, indicating consumers were still spending at a similar pace despite earlier RBA rate hikes.
Australian consumer and business confidence released in April, with both falling, reflecting both business and consumer concerns about the ongoing conflict in the Middle East.
The unemployment rate stayed at 4.3%, while the participation rate dipped slightly to 66.8%, in line with the RBA’s forecasts. Australian employment for March rose by 17,900, roughly in line with market expectations but lower than the past quarter. There was a large rise in full-time employment of 52,500 and a fall in part-time employment of 34,600. This easing in jobs growth should reassure the RBA that the labour market is starting to cool.
International
The Middle East conflict continues
The US and Iran agreed to a ceasefire while negotiations continued with an aim to end the conflict. The negotiations failed and the US blockaded the Strait of Hormuz. The ceasefire was extended as the US sought further guarantees from Iran about its nuclear plans. The Strait of Hormuz has been largely closed for the past two months.
Many central banks continued to sound hawkish in April. The Fed left the policy rate unchanged, noting that inflation remains elevated. The ECB held its deposit rate at 2% with a hawkish tone. The BoE held rates at 3.75%, noting that a loosening labour market, a weakening economy and tighter financial conditions could contain inflationary pressures. The BoJ held rates steady at 0.75% in their April meeting.
The US unemployment rate fell to 4.3%. The participation rate also fell.
Globally, Flash Purchasing Manufacturing Index data suggested the economy is slowing, while inflation pressures are rising - especially in Europe.
Market Review
Australian shares rose, following US-Iran ceasefire news
Australian shares increased by 2.2%, underperforming international shares.
The IT sector was the strongest performer, up 12.3%. This comes after it fell more than 44% over the last six months, so the rise likely reflects that prices looked more attractive. The real estate sector was the second best performer, up 8% in the month.
The healthcare sector was the weakest performer, down -8.4%, after news that the US will introduce the long-expected tariffs on imported pharmaceuticals.
International shares performed strongly
International shares (hedged) surged 8.6%, driven by positive news of the US-Iran ceasefire and hopes that oil prices may return to normal levels.
The best performing sector was the IT sector, up 17.3%, closely followed by the telecommunications sector, which was higher by 16.2%. The largest detractor was energy, which fell slightly (-3.1%), following a strong couple of months of performance.
Emerging market shares (unhedged) rose 9.3%, reversing the previous month’s losses on news of the US–Iran ceasefire. The countries that had underperformed the most due to higher oil prices—South Korea and Taiwan—were among the strongest performers.
Fixed interest markets were mixed
Australian government bonds posted a second consecutive month of weak returns, declining 0.1% as yields rose 9 bps. The move was driven by continued hawkishness from Australian and global central banks and an increased likelihood of further rate hikes following strong Australian inflation data, alongside expectations of renewed price pressures in coming months due to higher oil prices.
International credit spreads narrowed over the month, with global investment grade spreads decreasing by 9 bps, due to the risk-on sentiment in the month.
Listed real assets performed well
Both International and Australian listed property performed strongly, rising 7.4% and 8.5% respectively, even as global bond yields moved higher over the month. Both asset classes have been under pressure in recent months as expectations for interest rate hikes increased, and April’s gains reversed some of the earlier under performance.
Energy prices continued to see increased volatility
Commodity prices were steadier overall, with the S&P GSCI Commodity Index up 3.1%. However, this masks the mid-month swings: the index was down as much as 8.9% at one point before rebounding into month-end.
Oil was a key driver of the volatility. Brent crude fell to around US$86 on ceasefire news, before closing the month at US$113.
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