Coming straight after Westpac’s consumer confidence release, this is the second Australian sentiment survey in one session to show improvement that predates the latest escalation, reinforcing the sense that both readings already look somewhat out of date by the time they are published. The retail price decline, the first in seven years, is a genuinely notable data point on disinflation, but it was generated during a brief window when the U.S.-Iran deal was holding and fuel costs were falling, conditions that reversed within days. With Brent back near its highest since mid June and the RBA already flagging that further tightening cannot be ruled out, the softer cost readings in this survey are unlikely to carry much weight into the next policy decision.
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Confidence improved on a ceasefire that didn’t last long enough to matter.
Summary:
National Australia Bank’s business confidence index improved to -5 in June from a deeply pessimistic -14 in MayThe business conditions index held steady at +3 for a third straight monthProduct price growth eased back to its February level in June, and retail prices declined for the first time in seven yearsNAB said the results are consistent with slowing activity growth through the first half of 2026, but showed the Middle East conflict’s impact on activity and prices had been less severe than fearedTensions have since flared again in the Gulf, with the US renewing strikes on Iran and reinstating its shipping blockade through the Strait of Hormuz, and Brent crude has jumped back up around 2% to circa $85 a barrel, its highest since mid JuneThe Reserve Bank of Australia has raised rates three times this year to 4.35%, held policy steady in June, and warned further tightening cannot be ruled out
Australian business conditions held steady and confidence improved in June, a National Australia Bank survey showed on Tuesday, though the brief window of calm the data captured has already been overtaken by a fresh escalation in the Middle East. NAB’s business conditions index was unchanged at +3 for a third consecutive month, while confidence improved to -5 from a deeply pessimistic -14 in May, with the improvement attributed to the U.S. and Iran signing an agreement to end a multi month conflict that had triggered a global energy shock.
The survey also captured a notable easing in price pressures. Product price growth slowed back to its February level in June, and retail prices fell for the first time in seven years. According to NAB, the results remain consistent with a broader slowing in activity growth through the first half of 2026, but show that the Middle East conflict’s impact on both activity and prices has so far been less severe than had been feared.
That assessment is already being tested. Tensions in the Gulf flared again this week, with the U.S. renewing military strikes on Iran and reinstating its naval blockade of shipping through the Strait of Hormuz. Brent crude has jumped back up around 2% to circa $85 a barrel, its highest level since mid June, having surged sharply overnight. The reversal mirrors a similar pattern seen in Tuesday’s separate Westpac consumer confidence survey, which also showed an improvement driven largely by temporary fuel price relief that closed just before the latest spike.
The renewed volatility leaves the Reserve Bank of Australia with a complicated backdrop as it weighs its next move. The central bank has already raised rates three times this year to 4.35% in response to the energy shock, held policy steady at its June meeting, and explicitly warned that further tightening could not be ruled out. With cost pressures likely to reassert themselves as oil prices climb again, June’s softer readings on business and consumer sentiment may prove to be a brief respite rather than a turning point.
This article was written by fl6553e4b45d84486a91658a8b3f02bf22 at investinglive.com.