ASX Opens Higher, CBA & Westpac Predict Economic Slowdown, Qantas Test Flight

Market snapshot

D By David Chau

ASX futures: +0.4% at 8,788 points

ASX 200 (Tuesday close): -0.06% at 8,724 points

Australian dollar: +0.35% to 71.8 US cents

Wall Street: Dow Jones (+0.5%), S & P 500 (+0.1%), Nasdaq (flat)

Europe: Stoxx 600 (+0.7%), FTSE (+0.3%)

Spot gold: +0.1% to $US4,488/ounce

Oil (Brent crude): +0.9% to $US95.87/barrel

Iron ore: -0.6% to $US104.65/tonne

Bitcoin: -5.4% to $US67,523

Prices current around 7:30am AEST

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ASX opens 0.4pc higher despite complications in US-Iran negotiations

D By David Chau

The Australian share market has started its day slightly higher as investors shrugged off negative headlines about US-Iran peace negotiations hitting a roadblock.

The ASX 200 was up 0.4% to 8,759 points by around 10:15am AEDT.

I'll give you some more specific details in a bit!

CBA and Westpac predict a worse-than-expected economic slowdown

D By David Chau

Economists from the nation's major banks have a rather pessimistic view on what today's GDP figures are likely to show.

Commonwealth Bank is expecting Australia's economy to flatline in the March quarter (ie. growth of 0%).

"We lower our GDP estimate to a flat outcome in the March quarter," CBA's head of Australian economics Belinda Allen wrote in an update to clients.

"If this forecast comes to fruition it would see a slowdown in the pace of annual growth from 2.6% to 2.1%.

"Importantly, this will see the economy running around its potential rate of growth.

"From here we are expecting the Australian economy to slow. Three interest rate hikes, higher inflation, offshore uncertainty due to the Middle East conflict and the new downside risk from a soggy housing market are key catalysts for a slowdown."

As a point of reference, Reuters-polled economists are predicting 0.5% economic growth in the first three months of 2026 (which leaves the annualised rate at 2.6%)

Westpac senior economist Pat Bustamante is also anticipating a worse-than-expected GDP result.

He estimates: "Australia’s economy expanded just 0.3% over Q1 2026 and 2.4% in year-ended terms".

In a note to clients, Mr Bustamante said "the economy was slowing before the conflict in the Middle East, or the rate hikes in February, March and May, had really started to impact".

"The significant headwinds from the conflict will be more fully reflected in Q2 2026 [the June quarter], with the possibility of a quarterly contraction which would be the first quarterly decline since the GFC (excluding COVID)."

What to expect from the GDP figures, and what it says about Australia's economic growth

D By David Chau

Later this morning, we'll get an official update on how the economy has been faring — though the data will be somewhat dated.

The ABS will publish figures at 11:30am AEST, showing how much Australia's GDP (gross domestic product) increased in the March quarter.

So these figures will only cover the first full month of the US-Israeli war against Iran and the massive oil shock (from the Strait of Hormuz blockade) that happened as a result.

According to economists polled by Reuters, Australia's economy is expected to have grown by:

0.5% in the first three months of 2026 (which would be a slowdown compared to the 0.8% GDP growth recorded in the December quarter)

2.6% in the year to March, when that figure is annualised (on par with the year to December result)

If the actual result turns out to be lower than those estimates, it would mean the economy is facing a worse-than-expected slowdown.

That would, in turn, mean the Reserve Bank (RBA) is less likely to lift interest rates again.

And downgraded rate hike expectations will likely lead to the Australian dollar slipping from its current level (71.7 US cents).

Millions of Australia's lowest paid workers to get a pay rise from July

D By David Chau

In case you missed it, Australia's lowest paid employees will receive an above-inflation pay rise of 6%.

Meanwhile, minimum award workers will get a 4.75% remuneration boost, following the Fair Work Commission's (FWC) annual wage review.

From July 1, the new national minimum wage will be $26.44 per hour (up from $24.95), and $1,004.90 per week (up from $948), based on a full-time 38-hour week.

While the national minimum wage covers a very small proportion of the workforce, about 21% of all employees in Australia are paid at a minimum award rate, amounting to almost 2.8 million people.

For more on this development, here's the story by Lin Lin:

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Markets recap: Alan Kohler's finance report

D By David Chau

In case you need a refresher before the ASX opens for trading, I can certainly recommend Alan Kohler's finance report.

Alan talked about what we can expect in today's GDP figures (ie. how much of an economic slowdown Australia is experiencing) and how "the days of housing as the best investment may be over".

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Australians have become housing hostages. Will the budget set them free?

D By David Chau

Australians have been held hostage to the housing market for the better part of this century.

The cost of buying a typical home has jumped from about four times the typical annual income across most capital cities in the year 2000 to more than eight now.

While the Albanese government has framed its Budget tax changes as modest tweaks to help even the playing field between owner-occupiers and investors, make no mistake that these are significant changes.

If they weren't, the property sector would not be screaming blue murder.

No doubt there will be losers from a fall or long-term stagnation in property prices, but perhaps not as many as we fear.

For more, you can read the latest analysis from the ABC's business editor Michael Janda:

Qantas completes first test flight for Project Sunrise

S By Stephanie Chalmers

Qantas says it's completed the first test flight for its Project Sunrise Airbus A350-1000ULR, after recently confirming further delays to planes being delivered.

It's the aircraft it plans to use for its long-touted non-stop commercial flights between the east coast of Australia and London and New York.

"Operated by two Airbus Flight Test Pilots, three Flight Test Engineers and one Ground Test Engineer, Qantas' ultra long range A350 took off for the first time from Toulouse yesterday afternoon local time and flew for three hours 43 minutes over France and the French Atlantic Coast," the airline said.

So not exactly reaching the heights of Sydney to New York just yet.

"The flight was focused on testing the aircraft's primary systems including the jet's specialised fuel system, which includes an additional 20,000 litre rear centre fuel tank that will enable commercial flights of up to 22 hours non-stop," Qantas said.

It's the start of two months of testing for the aircraft, which will see it complete around 80 hours of flight testing, checks and certification.

Last week, Airbus announced that it would not deliver an A350 long-haul plane to Qantas until April next year. It had previously been expected delivery by the end of this year.

Qantas today confirmed the Project Sunrise aircraft is "progressing through Airbus' final assembly line" and is at the interior fitting and painting stage, ahead of the April 2027 delivery.

The details of the route and timing of the first commercial flights in the long-haul project will be announced later this month.

Stop the Flaming Trolls — Choice calls for toy crackdown

M By Michael Atkin

A troll doll with a cigarette lighter inside its body is just one of many unsafe products being sold online that places the public at risk – according to consumer group Choice.

It’s calling on the Australian Competition and Consumer Commission (ACCC) to investigate online marketplaces and suppliers to see if they are selling unsafe products as part of a “super complaint” it has submitted to the regulator.

Choice says it found some of the products could be bought from stores like Amazon, AliExpress, eBay and Temu and included toys that appealed to kids.

Some of the products included a tongue stud, which could detach and cause internal injuries and a sky lantern, which posed a fire risk.

In a recent survey Choice says 359 people reported incidents with unsafe online purchases.

"We found that 6 per cent of people who had purchased those products online had suffered an injury or property damage or a combination of the two from purchasing an unsafe product," Choice Director of Campaigns Andy Kelly told the ABC.

It also wants the federal government to put in place stronger product safety laws.

Choice is one of three organisations that can make super complaints to the ACCC and it must respond within 90 days.

Last week the watchdog announced it was suing Amazon over alleged safety failures in relation to a unicorn backpack which contained button batteries.

Both Amazon and Temu said they had removed items after being contacted by Choice.

Temu added a novelty lighter to a blocklist while Amazon said it used artificial intelligence and safety teams to monitor products.

The other online marketplaces were contacted for comment.

AI optimism offsetting Wall Street's concerns about drawn-out Middle East war

D By David Chau

Wall Street ended its day higher as investors placed large bets on tech and AI companies and shrugged off the inflation spike that will likely occur from a long-drawn-out Middle East war.

The Dow Jones index gained 0.5% to 51,308 points, while the S & P 500 rose by 0.1% to 7,610 points — both of them hitting new record highs (again).

The Nasdaq Composite, meanwhile, was flat at 27,094 points.

US markets were was boosted by AI optimism as shares of Apple, Broadcom, Tesla, Micron Technology and AMD jumped by around 2-5% each.

Hewlett Packard shares jumped 19.5% after the AI server maker brought forward its long-term financial targets by two years.

Meanwhile, Google's parent company Alphabet said it was looking to raise $US80 billion in equity offerings, including an investment from Berkshire Hathaway, to fund a costly expansion of its AI infrastructure.

Marvell Technology's share price surged 32.5% after Nvidia CEO Jensen Huang called the chipmaker the next "trillion-dollar company" at the Computex conference in Taipei.

Marvell designs semiconductors, integrated circuits, digital signal processors and other products which are in high demand from companies building AI data centres.

Given Nvidia invested $US2 billion in Marvell back in March, it's not hard to imagine why Mr Huang is talking up the company's prospects.

- with Reuters