Australian Bond Exchange Weekly Update
16 April 2026
Market Insights
- Australian Consumer and Business confidence is falling strongly
- US core CPI increasing 2.6% p.a. for March
- US Producer Prices increasing less than expected in March
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Key Points
- Australia: The RBA increased cash rates by 0.25% to 4.10% p.a. at its March meeting. February CPI decreased slightly to 3.70% p.a., and the Trimmed Mean was 3.30% p.a.
- United States:The Federal Reserve left the federal funds rate unchanged at 3.50%–3.75% p.a. at its February 2026 meeting. The latest U.S. CPI inflation rate is at 3.3% (YoY) as of March 2026. Core CPI was more contained at 2.6% p.a.
- United Kingdom:The Bank of England held Bank Rate steady at 3.75% p.a. and CPI for February was unchanged at 3.0% p.a.
- Eurozone: The European Central Bank kept its key deposit facility rate unchanged at 2.00% p.a., and recent data show inflation in the euro area increased slightly to 1.90% p.a., up from 1.70% in January.
| Region | Policy Rate | Latest Inflation (YoY) |
|---|---|---|
| Australia | RBA Cash rate 4.10% p.a. | 3.70% p.a. to February 2026 |
| United States | Fed Funds 3.50-3.75% p.a. | 3.3% p.a. to March 2026 |
| United Kingdom | Bank rate 3.75% p.a. | 3.0% p.a. to February 2026 |
| Eurozone | Deposit facility rate 2.00% p.a. | 1.90% p.a. to January 2026 |
Australian Consumer and Business confidence is falling strongly
The Westpac Consumer Sentiment Index fell sharply by 12.5% in April, following a modest 1.2% increase in March. The decline has been driven by a combination of higher gasoline prices, rising inflation, and escalating tensions in the Middle East. In addition, business confidence is also falling sharply. The March NAB Business Survey shows that confidence collapsed from a neutral reading in February, representing the largest decline since the onset of the pandemic in March 2020. In addition, cost pressures intensified sharply in March with purchase costs showing their largest monthly increase on record.
Why is this important: Lower consumer spending will make it harder for businesses to increase prices and pass on costs, slowing down the economy, which in turn will help the RBA to fight inflation.
WTSP Consumer Confidence Index (Monthly Change)
US core CPI increasing 2.6% p.a. for March
The US March CPI rose 0.9% (MoM), with annual inflation lifting to 3.3%, up from 2.4% previously. Core CPI was more contained at 0.2% (MoM) and 2.6% p.a. The main driver was a sharp spike in gasoline prices, reflecting the oil shock linked to Middle East tensions. CPI was materially stronger at the headline level, but the composition was less concerning. However, the energy shock raises the risk of second-round effects, which is why markets still see limited scope for near-term easing from the Federal Reserve.
US Producer Prices increasing less than expected in March
March PPI was benign overall and below expectations, although the composition still points to a firmer core PCE deflator. Headline PPI rose 0.5% (MoM), in line with the prior reading but below the 1.1% consensus expectation. Core measures eased, with PPI ex food and energy at 0.1% and PPI ex food, energy and trade at 0.2%, both down from 0.5% previously. Overall, while the headline PPI outcome was softer, underlying details and firmer activity indicators suggest inflation risks remain, reinforcing expectations of a cautious policy stance.
World Economic Calendar
*Data accurate as at 16.04.2026
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