Market snapshot: Fair Work decision, AI impact, and Middle East conflict

Market snapshot

D By Daniel Ziffer

ASX 200 futures: -0.4% to 8,710 points

Australian dollar: +0.1% to 71.62 US cents

Dow Jones: +0.1% to 51,078 points

S & P 500: +0.3% to 7,599 points

Nasdaq: +0.4% to 27,086 points

FTSE: -0.7% to 10,338 points

EuroStoxx: -0.8% to 621 points

Spot gold: -1.4% to $US4,468/ounce

Brent crude: +4.8% to $US95.57/barrel

Iron ore: -3.4% to $US104.52/tonne

Bitcoin: -3.5% to $US71,028

Prices current around 7:30am AEDT.

Live updates on the major ASX indices:

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Fair Work weighs in on 'wild card' Middle East

D By David Taylor

The Fair Work Commission in its 2026 minimum wage determination has highlighted the uncertain economic outlook.

This view is consistent with what both the Reserve Bank and Treasury have said about the macroeconomy.

Here's another excerpt from the Fair Work announcement.

"... the Australian economy faces the wild card of the Middle East conflict which broke out unexpectedly on 28 February 2026."

"The consequential disruption to oil supplies has accelerated inflation in Australia through direct effects on the price of petrol and diesel and second round effects on the price of a range of goods and services.

"This has added uncertainty as to the trajectory of the economy at least in the near future, although we note that the Reserve Bank and Budget forecasts for the economy to the end of financial year 2026–27 have not substantially changed because of the conflict, and headline inflation is projected to return to the Reserve Bank’s target band by that time."

Fair Work decision exposes inflation problem

D By David Taylor

The Centre for Future Work's David Peetz has penned his thoughts on the Fair Work Annual Wage Review.

The centre is a progressive think tank.

"The FWC has clearly decided that it’s not going to let the real wages of low-paid award workers fall, by going for an increase that is pretty much the same as the RBA’s expectation for the June quarter inflation rate."

"It will have very little impact on inflation (it would add a little over 0.2 percentage points to the CPI if you assume no changes in profits or productivity) but that’s not surprising as the wages of award-reliant employees only account for about 11% of the national wages bill," David Peetz said.

"As always, it’s more than what employers had hoped for and, as usual, less than what unions asked for, but not by much, at least before the Middle East war led them to raise their claim."

'Particularly challenging decision'

D By David Taylor

The Fair Work Commission has conceded that the 2026 Annual Wage Review was a tough one.

Here's an excerpt of the announcement published just after 10am AEST.

"The determination of this year’s Review outcome has been particularly challenging because of the unusual degree of complexity in the interaction of the matters we are required to take into account."

"Until February this year, most elements of economic and business performance in Australia were sound.

"There was healthy economic growth and growth in jobs and hours worked, productivity, and business profits and investment during 2025, while wages growth remained moderate and real unit labour costs did not increase.

"However, the economy encountered capacity constraints in the latter half of 2025, with the result that the rate of inflation increased by more than forecast, to be well above the Reserve Bank target band.

"The tightening of monetary policy by the Reserve Bank which followed will undoubtedly slow down the economy in the year ahead."

The FWC is saying the macroeconomic backdrop to this wage review has been particularly complex.

RBA rate-setter Ian Harper stands up

D By Daniel Ziffer

Professor Ian Harper AO is a non-executive member of the Monetary Policy Board of the Reserve Bank of Australia.

He’s at the table, part of the group at our central bank that will announce what is happening with interest rates.

That decision come out a fortnight from now.

That decision – revealed on June 16 – will either cut, hold or raise the cost of money. It’s most impactful for people with big debts, typically home loans, but it also changes things for savers.

He is speaking right now at a CEDA event at the University of Melbourne, where he has an office as an eminent economist at the business school.

He's talking in his capacity as a member, “one of nine”, of the board. So it’s not his personal views.

But he’s keen to remind people he's not speaking “on behalf of the board” – only Governor Michele Bullock does that.

He's going to discuss the position of economy before the Middle East conflict, the "knock on impact" of energy prices on the economy and what this means for economic outlook.

I'll update you with the best bits.

Minimum wage rises well above inflation

G By Gareth Hutchens

Australia's minimum wage will increase by 5.97%, and minimum award workers will get a 4.75% pay boost, in the Fair Work Commission's (FWC) annual wage review.

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.

The pay increase will begin from July 1.

The pay increase in affect millions of low-paid workers. While the national minimum wage covers a very small proportion of the workforce, roughly 20% of all employees in Australia are paid at a minimum award rate.

According to the FWC, because of the part-time and low-paid characteristics of the modern award-reliant workforce, the wages paid to them constitute only about 11.2% of the national 'wage bill'.

Minimum wage decision handed down

D By David Taylor

Fair Work has made a determination on the minimum wage.

The modern award wage rates shall be increased by 4.75%, effective from 1 July 2026.

This is above the rate of inflation.

How batteries muscled out gas and pushed power prices down

D By Daniel Ziffer

Great read from chief business correspondent Ian Verrender about the big surprise of the past few weeks - power prices are coming down.

Here's the kicker:

"More than one-third of Australian households generate power via rooftop solar, while a revolution in home battery installations has dramatically changed the dynamics and economics of electricity generation.

"It is a shift that could help solve a decades-long energy crisis that has sent inflation soaring in recent years and contributed to higher interest rates."

ICYMI: House price growth is flattening

D By Daniel Ziffer

If you didn't see this from my colleague Lin Lin yesterday it's worth a read.

Australia's housing market stalled in May, with national home values flat after months of slowing growth.

Tax changes? The Iran conflict? Interest rates? A little of column A, B and C?

The weakness was led by Sydney and Melbourne, where values fell 0.9 per cent and 0.8 per cent respectively, according to Cotality data.

Check out the data, and what it means, here.

Show the working, dammit!

D By Daniel Ziffer

OK, OK, here's how Westpac calculates the fall.

I'm in Victoria, so I'll be spending the afternoon searching for previously unknown deposits of iron ore - trying to do my bit to balance the books.

State revenue to take a housing hit

D By Daniel Ziffer

Interesting look at the state-based impact of the federal budget's changes to housing taxes.

Some states (particularly the non-miners) will feel it hard - property and construction taxes make up a substantial percentage of their core funding, alongside GST distributions from the Commonwealth.

Westpac analysts Imre Speizer, Uma Choudhury and Damien McColough have numbers that will likely cause Victorian Treasurer Jaclyn Symes and NSW Treasurer Daniel Mookhey to grimace and commence their third thousand-yard-stare-out-the-window of the morning.

Here's what they (Westpac) say:

"Using the sensitivities to a 1% deviation from estimates available in the budget, we can use our forecasts to estimate the impact on each state’s revenue stream.

"Total housing market turnover is expected to decline 20% in aggregate across the Commonwealth. If applied equally to all states it implies hits to revenue of $2.3bn and $2.0bn for NSW & Victoria, although that could be conservative given that we could perhaps assume they would take the brunt of the fall.

"When combined with the impact of a shift in prices, the numbers for these two largest states are $2.7bn and $2.9bn respectively."

No, giving a family member $20,000 is not a tax deduction

D By Daniel Ziffer

It's tax time!

So get set for my colleague Nassim Khadem's annual article about the wild things people try and claim as deductions - costs that would lower their taxable income.

ATO assistant commissioner Anita Challen said each year the agency got unusual claims that they had to reject:

"We've seen a taxpayer look to claim $20,000 that they gifted to a family member as a tax deduction — definitely a no-go zone in terms of putting that in your tax return."

So that person doesn't get to deduct $20,000 from their taxable income. But presumably the person gifted the $20,000 gets to keep it.

I'll upload my bank details shortly in case anyone wants to test this theory by making a contribution.

Check out the article here:

Telstra expected to be 'smaller' in 2030 thanks to AI: CEO

N By National AI reporter Cameron Wilson

Telstra's chief says the telco expects to have a smaller workforce by the end of the decade because of artificial intelligence.

CEO Vicki Brady made the comments about the impact of the new technology on Telstra while speaking on a panel of business leaders at the Australian Financial Review's AI Summit on Tuesday.

"No one knows what 2030 looks like, but our best estimate [is that] we would expect our organisation to be smaller in 2030 than it is today," she said.

Brady said the idea of a reduced workforce might cause "fear and uncertainty" and that Telstra was focusing on training its staff to adapt to the change.

"Rather than, you know, dwell on that, we have focused on investment in skills and capability because, no matter what 2030 looks like, I'm more convinced that [AI literacy] becomes just a foundational skill," she said.

Earlier this year, Telstra axed 650 roles, including 200 from its joint AI venture with consulting and technology firm Accenture.

"These proposals are intended to help us reduce complexity, be more competitive and operate more efficiently and sustainably," Brady wrote in an email announcing the cuts to staff.

What happened overnight?

D By Daniel Ziffer

Stocks are steady at record highs as AI optimism trumps Iran tensions, Chibuike Oguh of Reuters reports.

Here are the key points:

Oil prices surge as Gulf hostilities threaten Strait of Hormuz reopening

AI demand drives global stocks to record highs despite Iran war

Wall Street stocks finish higher

Dollar rises as gold falls

Global stocks clung to record highs on Monday as strong corporate results, fueled in part by artificial intelligence optimism, outweighed investor concerns over escalating U.S.-Iran tensions that have pushed oil prices higher.

The United States said it struck Iranian military sites during the weekend and Iran's Revolutionary Guards said on Monday it had targeted a US base in response. Iranian news agency Tasnim said Iran is halting indirect negotiations with the United States after Israel ordered troops to push deeper into Lebanon to battle Iranian-backed Hezbollah.

The fresh hostilities could complicate diplomatic efforts to end the three-month-old war.

On Wall Street, stocks eked out gains to finish near record highs after trading flat early in the session as energy and technology stocks took the front seat, while utilities and consumer discretionary led losers.

The Dow Jones Industrial Average rose 0.09%, the S & P 500 added 0.26%, and the Nasdaq Composite gained 0.42%.

The pan-European STOXX 600 index fell 0.76%.

"The Iran story continues to swirl around in the background, and I think it's pretty interesting and impressive that the market has been able to, not completely ignore it, but dismiss a lot of the noise," said Amanda Agati, chief investment officer at PNC Asset Management Group in Philadelphia.

"Earnings growth and Q1 earnings season, and even the revisions for Q2, are looking really strong. And so I think it's just sort of this interesting dynamic where usually the headlines are driving the market narrative, but this market is trying to price a path to peace, whatever that ultimately looks like," Agati said.

Nvidia unveiled a new chip on Monday that puts AI capabilities directly into laptops and desktop computers, raising the stakes in the battle for dominance among other semiconductor makers and technology companies.

AI giant Anthropic said on Monday it has confidentially filed for a US initial public offering.

The MSCI All-World index rose 0.10% after hitting a fresh record high on the day.

"We are in an unusual period for the market where the fundamentals and technicals converge to drive markets higher, with strong earnings revisions and relentless buying," said Mark Hackett, chief market strategist at Nationwide in Philadelphia. "Equity markets have been largely immune to Iran news over the past several weeks because investors are afraid of being caught on the wrong side if a significant development occurs."

Brent crude futures rose 4.24% to settle at $94.98 a barrel.

'I will not let this rest': senator Deborah O'Neill puts KPMG and consulting firms on notice

D By Daniel Ziffer

Scandals surrounding consulting firms misusing confidential information are rolling on ... pushed hard by Greens senator Barbara Pocock and Labor's Deborah O'Neill.

The latter has just been on AM, and you can listen to it via the link below.

Here are the top lines:

"What I'd call on is these large entities (the 'Big Four' consulting firms) KPMG, PWC, EY, Deloitte; clearly it's time for them to actually change their transparency in the public place. These failures, one after another, indicate that there's a problem with the structure.

"There's a problem with the practice. There's a problem with the culture. And while Australian superannuation is clearly my focus, I will not let this rest."

Asked about why this came to light via a whistleblower rather than regulation or enforcement:

"So (regulator) ASIC gave evidence to the committee on Friday that their capacity to investigate goes to registered company auditors.

"They can't actually oversee a partnership, which is what this model of KPMG, PWC, EY, Deloitte, they can't oversee that because that's covered by state legislation.

"So there's this hidden space, if you will, in which this business model is operating. And they have all the window dressing of