Daybreak Weekend: US Jobs Preview, NATO, RBA's Rate Decision
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Bloomberg Audio Studios. Podcasts. Radio. News. This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our daybreak anchors all around the world. Straight ahead on the program, a look ahead to the March jobs report and Q1 auto sales and what President Trump's tariffs on auto imports could mean to future sales.

I'm Tom Busby in New York. I'm Caroline Hepka here in London, where we're assessing the position of NATO amidst growing global tensions. I'm Doug Krisner previewing next week's rate decision from the Reserve Bank of Australia. That's all straight ahead on Bloomberg Daybreak Weekend.

on Bloomberg 1130 New York, Bloomberg 99.1 Washington, D.C., Bloomberg 92.9 Boston, DAB Digital Radio London, Sirius XM 121, and around the world on BloombergRadio.com and the Bloomberg Business App.

Good day to you. I'm Tom Busby. We begin today's program with a look at the March jobs report out this coming Friday, the same day we're going to hear from Federal Reserve Chair Jerome Powell. What could all this mean for the U.S. labor market and for Fed policy moving forward? Well, good news. For more, we're joined by Michael McKee of Bloomberg International Economics and Policy Correspondent. Michael, thank you for being here. Well, let's start with that jobs report. What do you expect to see?

Well, we expect to see a slowdown in job creation.

We're still a week out, so there will be a lot of data that comes in on employment from other indicators that will go into the general forecast. Right now, we have 135,000 as the forecast, and it was 151,000 in February. But that could bounce around a little bit. The key for the Fed is unemployment, and unemployment is not expected to change, stay at 4.1%.

The question is, is anybody going to care about the jobs report by next Friday? Well, I guess they'll care because, I mean, with the Trump policies, the tens of thousands of federal workers being laid off, and things are changing every day, the tariffs, I mean, all this adds up to what we're going to see. In terms of the jobs report, yes. The real question is whether we see a lot in this month.

Because of the timing of it all, the jobs report taken in the first weeks of the month, and we don't really have a good handle on how many people have been fired. Last week, the government reported we had only 821 federal workers filing new claims for unemployment.

Part of it is that people get laid off. They get unlaid off. They get laid off again. I imagine many federal workers don't know what their job situation is. So expect to see a lot of cuts in federal employment, but maybe not this month. Wow. And there's other data that we saw come out. PCE for March.

indicative of where jobs may be coming or going? I mean, with consumers pulling back? Consumers have pulled back just a little bit. It isn't a huge drop because we had seen a huge drop in spending in January. And this was a 4%.

four-tenths rise, not too bad, but it did come mostly in durable goods. So it suggests maybe people were afraid of tariffs and running out and buying stuff, I don't know, refrigerators, stoves or something, cars, before prices went up. And then the University of Michigan sentiment indicator came out and normally doesn't move much between the preliminary and the final, but in this case it did. We saw a big drop in

in overall sentiment and in expectations. And then we saw inflation expectations rise significantly to 5% over the next year. So Americans are anticipating bad news from Liberation Day next week. Yeah, that's a lot of inflation fears right there. Well, let's talk about Liberation Day and President Trump's tariffs. We know they change week to week, day to day, sometimes hour to hour. But

What is the impact right now on the economy, on jobs? I mean, clearly people are worried. Consumers are concerned. Right now it has people concerned. It has businesses concerned. We've seen that in business leaders' surveys. And obviously the Michigan and Conference Board numbers show us consumers are feeling the same way. They haven't, in the hard data, acted yet. But that's what we're expecting to see over the next couple of weeks.

especially if people go to the store and see prices higher. That really drives consumer behavior.

particularly for things like gasoline and food, which may take a little longer to work their way into this. And of course, you don't buy a car every day, but if you notice, prices are going up. So it's something that the Fed has to worry about. There are all kinds of estimates on what this could do to inflation, could push it up by 1.5%, 2% for the year.

One forecast that came out this last week from a Wall Street firm was we would see inflation over 4% for the next three, four, five months. That would not go over well with the American public. No. And Susan Collins from the Fed Boston Bank said it's coming. It's coming. And the thing is the Fed doesn't know what to do yet because they don't have –

handle on exactly what the president's tariffs are going to do. And the best line came from the Richmond Fed president, who said, this is not a fog of uncertainty like you normally see. This is a pull over to the side of the road and put on your high beams kind of fog of uncertainty, because we have no idea. Tom Barkin saying that we have no idea what's going to happen.

Well, let's hope Jerome Powell gives us a little clarity. He is speaking this Friday. We're going to hear from him. Why don't you tell us what you expect? Yeah, that's where the church lady line comes in. How convenient that the Fed chair is speaking the same week as Independence Day. He is speaking on Friday, and we will get...

I don't see how he can avoid giving us some view on what impact the tariffs are going to have on the economy, both on inflation and growth. And if that's the case, then there's going to be a lot for investors to try to parse in terms of what it means for Fed actions.

So it's going to be a very, very busy week. Powell and Jobs on the same day. So all of you who thought you were going to get away to the Hamptons or upstate early, not on Friday this week. Well, the March non-farm payrolls numbers out this Friday, 8.30 a.m. Wall Street time. Our thanks to Michael McKee, Bloomberg International Economics and Policy Correspondent.

We turn now to the U.S. auto sector ahead of first quarter vehicle sales out this Tuesday, just before President Trump's punishing 25% tariffs are slated to go into effect on all imported autos. For more on how those tariffs work,

if they go into effect, could impact consumers, investors, U.S. and foreign automakers and more. We're joined by Steve Mann, Bloomberg Intelligence Global Autos and Industrial Research Analyst. Steve, thank you for being here. And boy, is there a lot to unpack here.

Well, let's start with a look back. It looks like the industry was off to a pretty solid start, not spectacular, to the new year, despite high sticker prices and elevated borrowing rates. But boy, if these tariffs, if implemented, things could really change. How would that change everything? Well, we actually just published a report and we lowered our sales forecast for the U.S. passenger vehicle sales.

We were at down half a percent. Now we're looking at down at least 3% for the year. Well, prices are going to go up. We're hearing dealerships out there telling their customers that prices are going to go up. There's different numbers out there depending on the price of the vehicle could be $3,500 or as much as $10,000. So it's going to really put a dent on sales.

But on the flip side, it's going to help used car sales. So if you look at, you know, Avis and Hertz, they're actually responding positively to the news because, you know, if they sell their used fleet, they're going to get more money for it and the balance sheet improves. And the other thing that's reacting positively are, you know, the retail sales, parts sales. Companies like O'Reilly, Advanced Auto Parts, you know, they're actually bucking the trend.

So if consumers are not going to buy new cars, they're going to have to probably have to fix up the old one and keep it a little bit longer. So it sounds like a lot of cars are going to stay on the road a lot longer. And the average now is like 11 and a half, 12 years, isn't it? Yeah, that's right. So, you know, you kind of mentioned it earlier. The consumer is already hesitating to buy a new car because prices have gone up quite a bit, especially on those big pickups.

pickup trucks and SUVs, you know, leasing upwards of $1,000 to $2,000. So it's becoming out of reach for a lot of consumers now. Yeah, the consumer definitely appears to be the loser here. Let's talk about the automakers, especially Detroit's big three and how they'll be impacted. And will they each be impacted in the same way? I know Ford makes a lot more of its cars in the U.S. than the other two.

Yeah, look, I think all three, Stellantis, Ford and GM will be impacted by a lot. Not just on the initial cost of the tariff. Also, if they have to reshore some of their plants, we have an analysis out there that

that tells us it could cost as much as $4 billion if they have to build a new plant in the U.S., shift that plant back into Mexico and build a new one in the U.S. That's a lot of spending. That's only for one plant. They have multiple plants in Mexico and Canada that

that they can reshore. So it's huge. The other thing for Ford specifically too is one of the things we're looking at is their EV sales have been

generating huge losses for the company in the last two, three years. And especially, for example, the Mach-E, one of the most popular ones, they're actually built in Mexico. So if they have to lose another $10,000 on that vehicle, it begs the question is, should they even continue building that vehicle? And what that means is it's

It's, you know, the big three, Ford, as well as GM, could actually lose EV market share to the pure place, not just Tesla, but to also Rivian and Lucid. Well, let's talk about Tesla and the EVs. Tesla makes every car it sells in the U.S. in the U.S. It plants in Texas and California. And how does it stand to win? And as you said, Rivian, Lucid, Faraday Future, all these other ones, smaller ones, niche ones, are they going to be the winners here, too?

Yeah, I think so. Because they have a very different manufacturing footprint or different business model than the legacy automakers. They're more vertically integrated. So a lot of the most expensive components in an EV, the batteries, the charging systems, the battery management system, they're actually built in-house. The motors are actually built in-house.

So they have much better control of the cost. And obviously, because they are building house in the US, they're not subject to the tariff.

as high as the legacy automakers. Interesting to watch if it all goes into effect. First quarter auto sales out this Tuesday. Those 25% tariffs on all imported autos kicking in Thursday morning, 12.01 a.m. Wall Street time. Our thanks to Steve Mann, Bloomberg Intelligence Global Autos and Industrials Research Analyst. Coming up on Bloomberg Daybreak Weekend, calls for unity at a NATO summit this week. I'm Tom Busby, and this is Bloomberg.

When you have bars in the sky, onboard showers and award-winning in-flight entertainment, it's no surprise that Emirates was recently named the best airline in the world. We fly you to over 140 destinations and with partners across the globe, we connect you to another 1,700 cities across six continents. So when we say we're also the largest international airline, what we really mean is...

If you're going there, so are we. Book now on emirates.com. Fly Emirates. Fly better.

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This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom Busby in New York. Up later in our program, a big decision this week from Australia's central bank. But first, at a fraught time for geopolitical security, defense is front of mind for world leaders and bolstering protection will be certainly high on the agenda at the NATO headquarters in Brussels this week, where allied foreign affairs ministers meet to discuss the future of the world.

for talks chaired by Secretary General Mark Ruda. Now, for more, let's go to London and bring in Bloomberg Daybreak Europe anchor Caroline Hepker. Tom, speaking to Bloomberg earlier this month, the NATO chief Mark Rutter expressed his desire for relations with Russia to return to normal once fighting subsides in Ukraine. But the body's secretary general was quick to acknowledge that there's a long way to go before proceedings reach that stage.

He is preparing to chair discussions between allied foreign ministers in Brussels, the latest event on a recent packed schedule for Rutter, who has flown around the world to discuss the ongoing war in Ukraine with numerous world leaders. Included in his travels was a stop in Washington, D.C., where he met with the U.S. President Donald Trump.

Russia has been engaging in intense diplomacy in recent weeks to keep the transatlantic alliance together as Trump has pared back support for Ukraine and has indicated that the US will step back from its traditional security role in Europe. The surprise move has sent European countries scrambling to boost defence spending and to rethink their military positioning.

The NATO chief has said that he is confident Trump is committed to NATO and that there is no room for doubt there in his words, whilst also praising Trump for breaking the deadlock between Russia and Ukraine. The delicate situation between President Trump and his counterparts in Europe and its impact on markets is something that we've been discussing with Carl Tannenbaum, who is chief economist at Northern Trust.

For many reasons, a truce between Ukraine and Russia would be very much welcome, but there are some hard yards to be walked before we achieve that outcome. And absolutely, the forecasts for Europe are actually going up when they, for major centers elsewhere in the world, they're going down.

I'm sure that the Europeans would have preferred to stimulate other than at the end of a figurative bayonet. But the fact is, is that the prompting that this did to have the Germans and the Europeans open their budgets will be favorable for their growth picture and their markets reflect that.

You've said that it's difficult and that you underestimated, along with many others, the reality of the tariff, I'll call it a tariff war, from President Trump. In terms of the tensions, how do you think about the tensions between the US and the EU? The EU says that there really wasn't any negotiation, particularly that they had no success with negotiating with the Trump White House. What does that mean economically that those ties are now so much more difficult?

The risk of the current strategy is that the alienation that comes from the first steps will make it very difficult to come back together in any meaningful way. There's an injury felt by counterparts of the United States in the way that this is being done. And voices that might have normally been heard have yet to be accounted for.

I certainly hope that the damage done is not lasting and that there is a phase to come yet this year where there will be more consultation and less provocation. But I hope that comes right soon. It's taken longer than I would have thought. That was Carl Tannenbaum, chief economist at Northern Trust, speaking to me and to Bloomberg's Stephen Carroll.

So how will these dynamics play out during the upcoming meeting of foreign ministers? I've been speaking to Bloomberg's EMEA News Director, Roslyn Matheson. Ros, good to speak to you. What normally happens at these NATO meetings?

Well, it depends who's meeting because some of them are ministerial level and some are obviously leader level, which are the big shebang. And it depends which ministers are meeting. In this case, as you say, it's foreign ministers meeting. And their task tends to be, well, a little bit thankless, to be honest. They're often the ones who are meeting to pave the way for

into the Leaders Summit, which we know is coming up some months later. And so their job is to iron out any of the kinks ahead of that, to work out what's going to be on the agenda, to do some behind-the-scenes agreements and understandings and then take all of that back

in a way, to their headquarters at home. And that's all about laying the table for that meeting. I mean, obviously they discuss a broad array of topics and for foreign ministers, it can be a very broad church discussion.

Indeed, and for this meeting, it will be about a bunch of stuff that's very topical at the moment, but will also be about all those kind of sideline conversations, hallway conversations to get a bit of an understanding about what they're going to be looking like going into a leaders summit. So will all member states be in attendance? Yes.

At this stage, it appears so, including the US Secretary of State, Mark Rubio. I mean, it's an interesting question because we've seen at some gatherings, including G20 meetings and so on, that the US has opted not to attend or to send a lower-level official questioning, it seems, whether these forums do anything that matters or whether they need to be there. But it looks like Mark Rubio will turn up. And obviously, he's been quite engaged recently

with NATO and with Europe as a whole. He recently met with a bunch of ministers from the Baltics, for example. He recently met with the Turkish foreign minister who was visiting him in the US. So he's certainly engaging with his counterparts across Europe. So we are expecting a full bench for this meeting. Is it possible, Roz, that there might be something of a tense atmosphere between the US and EU members, given that the meeting comes hot on the heels of

these leaked messages on the Signal app, which featured senior members of the Trump administration describing EU states as, quote, freeloaders. Well, it's going to be an interesting meeting in the backdrop of those revelations around the Signal chat. And for European ministers who were there, no doubt questioning Marco Rubio quite a bit.

about how secure intelligence is that they're sharing. I mean, there's a lot of communications that have to go on in a circle of trust and understanding that whatever you talk about or whatever is shared is within a certain cone of silence because you can talk more candidly

as a result. And so if you have European ministers even more worried than they probably already were about how to communicate with the US, how to talk openly and honestly with officials, including Marco Rubio, what about how secure intelligence is that gets shared? And so all of that

will be aired in that meeting, no doubt. You're unlikely to see Europeans stop sharing intelligence with the US. They just need each other too much to do so. But you will get certainly expressions of concern about that at the meeting.

Now, we did see the NATO Chief Mark Rutter in the White House in the Oval Office with President Trump. When they had that discussion, he was talking about being confident of the president's continued support. Talk us through the complications, though, of the relationship. Are things still on the right path?

It was interesting to see that meeting, actually, because it seems as though Ritter and Trump kind of hit it off. Like they at least had a bit of a rapport. And Ritter was treading very carefully in his comments and seemingly knowing how not to press Donald Trump's buttons. And so that is obviously a plus to have that relationship seemingly on a positive footing. But the overall relationship between the U.S. and NATO is pretty poor.

I mean, Donald Trump has been repeatedly critical of NATO, be it over how much other nations spend on their defence, you know, the collective nature of NATO, whether it's worth what he sees as the US investment in

In NATO, what does the US get out of it? I mean, it's worth pointing out the only time that Article 5, the collective responsibility area of NATO has been invoked was by the US in its many decades. But, you know, Donald Trump has...

repeatedly called into question NATO, what it's for, what it serves, where it's going. And so a personal relationship with Ruta, which is quite positive, is not going to really negate all of that. So there are fundamental questions here for the US about their future role in NATO either way.

What do you think might emerge from these talks? Will it be focused on Ukraine? Will it be again back to the amount of defence spending? I mean, we've had Germany, for example, bring out a really big defence bazooka in terms of how much spending they're going to try to enact. What do you think might emerge from these discussions? Will there be any resolutions?

Well, unlikely to be anything you'd call a breakthrough because Marco Rubio has not been so centrally involved in the conversations that the US is having with Russia and the US is having with Ukraine. Other officials in the US seem to be taking the lead on that. So he's not been directly involved in many of the conversations around that necessarily or even potentially seen as a decision maker on that.

And so you can expect a lot of conversation, as you say, around security issues, particularly the future of the war in Ukraine. Is there a ceasefire? Is it going to be tangible? How to get it to be broader than just the Black Sea or energy infrastructure? And either of those don't seem to be particularly secure at the moment anyway. And those issues, as you say, are around European defence, defence spending, NATO. But because it's foreign ministers, it's also a pretty broad church. So you can imagine...

topics around trade coming up, tariffs obviously, and the impact economically of the tariffs that Donald Trump is enacting around the world, including on Europe. So the economic relationship, because the economic relationship is a key part of the geostrategic relationship alongside the pure defence one. So you can imagine that at this meeting there'll be a broad conversation about a bunch of topics.

involving Europe, NATO and the US. So not just defence, trade will probably come into it somehow. But again, you're unlikely to see major tangible announcements coming.

That was Bloomberg's EMEA News Director Rosalind Matheson. My thanks to her. We will have full coverage of that NATO meeting at the headquarters in Brussels from the 3rd to 4th of April right here on Bloomberg. I'm Caroline Hepka in London. You can catch us every weekday morning for Bloomberg Daybreak Europe beginning at 6 a.m. in London. That's 1 a.m. on Wall Street. Tom. Thank you, Caroline. And coming up on Bloomberg Daybreak Weekend, the Reserve Bank of Australia meets this week.

to make a decision on interest rates. Bloomberg's James McIntyre breaks it all down from Australia. It was a weaker than expected CPI reading. We had the headline come in at 2.4%.

Consensus was 2.5. We were at the 2.4. But we'd said all along that that probably wasn't enough. It would need to be something exceptional to pull the RBA over the line. They're going to be delivering gradual rate cuts. And following up from there, February with an April cut was just too much, we think, given what the rest of the economic picture is telling them. It needed to be exceptional. It's welcome. But in our view, it's not enough to push them over the line on April 1st.

That's next here on Bloomberg Daybreak Weekend. I'm Tom Busby and this is Bloomberg.

When you have bars in the sky, onboard showers and award-winning in-flight entertainment, it's no surprise that Emirates was recently named the best airline in the world. We fly you to over 140 destinations and with partners across the globe, we connect you to another 1,700 cities across six continents. So when we say we're also the largest international airline, what we really mean is...

If you're going there, so are we. Book now on emirates.com. Fly Emirates. Fly better.

Thrivent can help you plan your finances for the people, causes, and community you love. What makes Thrivent different? A combination of financial services and generosity programs. Thrivent offers advice, investments, insurance, banking, and generosity, as well as resources to fund service projects or direct dollars to causes you care about. With more than 120 years serving clients, you can plan your finances with confidence. Visit Thrivent.com to learn more. Thrivent.

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The Reserve Bank of Australia cut its benchmark lending rate in February for the first time in four years. Will the RBA cut rates again when it meets this week? For more, we turn to Doug Krisner, host of the Daybreak Asia podcast. Tom, last week, Australia's center-left government unveiled a pre-election budget.

Now, it included tax cuts and some other sweeteners aimed at soothing concerns about the high cost of living. Australia Finance Minister Katie Gallagher discussed the potential impact of inflation and interest rates in an interview with Bloomberg. Well, the budget's always a series of balancing decisions and balancing, you know, requests for investment and other, you know, other ways of dealing with all the pressures on it. But

it but we see these as a good way to provide a bit of relief to households. They're a top up to the tax cuts that were passed and started flowing in July last year and really when they're put together with those tax cuts and once fully implemented it'll be about

for the average worker about $50 a week. So we're not pretending that they aren't modest, that's for sure, but they're topping up the work that we'd already started a year ago. Well, that's true. I mean, the Treasurer, Jim Chalmers, also used the word modest when he was describing them. And when you consider the size and the timing of them, was there some consideration given to the inflation risk as well?

Well, that goes to the timing decision to have them start next year, really to make sure that inflation is back into band and that we are mindful. Obviously, Australia as a country has done a lot of heavy lifting to get inflation back

down to more normal range and we don't want to jeopardise that and so the timing of when they come in was factored into our thinking and into the Treasury forecasts. And when it comes to forecasts around inflation, that's forecasted to be back inside the RBA's target range, making it pretty hard here to mount an argument against further easing, right?

Well, we obviously leave the bank to make their decisions. You know, our responsibilities are contained in the budget, but we are really pleased the Treasury forecasts have inflation turning sustainably or coming back

back sustainably into the band six months earlier than had been expected at my info. And so that's really welcome news. Obviously we'll leave the bank to make decisions based on the information they have. Turning to some questions around spending as well. We were expecting to see perhaps a substantial boost to defence spending considering the

well, the geopolitical environment at the moment, potential pressure from the US as well. Was there a temptation to go a little bit bigger there because we're rising to 2.3% of GDP by the early 2030s?

Look, we've put a lot of work into working out the priorities in defence and the Defence Minister has led that in conjunction with his department. We've found an extra $50 billion over the medium term for defence. That's not an insignificant amount of money when you think about it. We've brought forward some money in this budget based on a defence advice about their capability needs, so that is met. But I also think you should look at defence and national security

bringing in all of the intelligence agency, the work that DFAT's doing to stabilise our relationships in the region. It is very uncertain global times as everybody is witnessing and so investments in defence are essential but so are investments in a whole range of other areas to make sure we keep Australians safe. We also have a forecast for deficits for a decade. Is there any sense of urgency to do something about that sooner?

Well when you look at the budget you'll see under this government we've had the biggest nominal turnaround, the most significant nominal turnaround in the budget forecast of any first term government. So we've improved the budget bottom line by over $200 billion. Again, massive numbers I know, but we've improved the deficits, we've delivered two surpluses, we've paid down debt

And we're paying, you know, because we've lowered debt, we're paying lower interest bills on that debt. That all matters. So we have absolutely since day one, it's probably the key part of my job is to work out how we make sensible savings and bring those deficits and head the budget back into balance in a reasonable timeframe. But we also have to be realistic that we have to pay

for services, for Medicare, for defense spending. There's no shortage of pressures on the budget and the budget balances all of those up. That is Australia Finance Minister Katie Gallagher speaking earlier with Bloomberg's Paul Allen. Joining me now to explore what we may hear from the RBA next week is James McIntyre. James covers Australia and New Zealand for Bloomberg Economics, joining us from our studios in Sydney.

Can we begin by kind of unpacking this weaker than expected inflation data? I'd like to know whether or not these readings are enough to prompt a rate cut from the RBA. What do you think? Well, our view is that no, it's not. It was a weaker than expected CPI reading. We had the headline come in at 2.4%.

Consensus was 2.5. We were at the 2.4. But we'd said all along that that probably wasn't enough. It would need to be something exceptional to pull the RBA over the line. They're going to be delivering gradual rate cuts. And following up from there, February with an April cut was just too much, we think,

given what the rest of the economic picture is telling them. It needed to be exceptional. It's welcome. But in our view, it's not enough to push them over the line on April 1st. So where is this inflationary pressure coming from? Is it goods inflation? And if so, what are the commodities or items involved? Or maybe it's a little bit more service related.

The mix within the Australian inflation story is very much a services story and goods inflation has really fallen away, especially goods inflation around energy goods, automotive fuel. That's down quite a bit. But on the services side, we've seen housing rents, insurance,

new construction costs, but also medical and education services costs. They've been some of the key ones. There's some welcome developments on the services side, which is allowing the RBA to move. Rents have eased. They're continuing to ease. New construction costs are coming down. And insurance costs are starting to kind of ease back as well. So it's good. It's welcome. It's enough, we think, to get them over the line when the full quarterly CPI is released ahead of the May meeting.

but just not enough yet to push them over the line for April. So are you thinking that the next rate cut would be in May? Is that your thinking? That's our base case. So our base case for some time has been that the RBA would be delivering 25 basis point rate cuts per quarter, May, August, November. They're key meetings where they do the quarterly forecast update following the quarterly CPI readings.

We still think that there's nothing to kind of change our view on that, including nothing really in the government's budget, which was released on Tuesday evening by the treasurer, outlining some election policy goodies. We don't think there's anything there that really threatens that gradual but sustained RBA cutting cycle through the course of this year. So you mentioned the federal budget. What is the aim here on the part of the government? What are they trying to achieve?

Well, I guess the key aim is re-election. So we think the government will swiftly follow this budget by announcing an election, possibly with an election campaign over the coming weeks and a polling date sometime in May. But what have they done in this budget? Well, they have kept...

The fiscal position, relatively unchanged. That is that they've banked some revenue upgrades from commodity prices and a stronger labour market, and they've ploughed those extra tax receipts into some more spending and some tax cuts.

Small tax cuts for individuals, some further support on power price relief for households, and then additional spending on making doctor's visits cheaper, some more childcare, all very popular election goody-type spending. Not a lot of it, though, and not enough spending to move the dial from a macro perspective and worry the RBA, but I guess the government's hoping that that spending is enough.

to sound good and entice voters at the ballot box. So you teased out some of the winners as a result of this federal budget. Who would the losers be? Yeah, losers in the budget, I guess...

Within the housing construction sector, there had been some hopes that there would be some further measures to help boost construction. We didn't really see anything there. Overall, though, what the budget didn't deliver is any concrete, sustained microeconomic reforms.

There was some good work done on competition policy, but none on sort of the real deep-seated issues around reining in the structural deficit for the policy. With an election looming, the government has tried to minimise the obvious losers, and that's sort of what stands out to us from the latest budget offering.

James, I'm curious to get your take on what you're hearing as it relates to US tariffs. That seems to be the looming threat right now. Australia's Treasurer, Jim Chalmers, was making some comments in the last week. Is there a position that the government has or are there areas open to some type of negotiation? Should it come to that? The government is looking to...

Stay friends with the administration and do all the right things. Australia does do the right things when it comes to what the Trump administration might want. We run a trade deficit with the US. We have been lifting our defence spending, but we also provide major contributions to defence bases and expenditure for US troops that are stationed here as the US military has been

undertaking a Pacific pivot for some time now to muscle up to China. Australia is part of that effort. When it comes to tariffs, we're not retaliating. And what the government is doing is trying to offer support to affected industries. There aren't many in Australia, but steel, aluminium, and possibly depending on how the April 2 Liberation Day tariffs play out, possibly the beef sector as well.

whilst in the background doing the legwork with the US administration to try to win some exemptions and some favour in Australia's way. We don't know how it's going to go yet, but that's the path that the government is trying to very gently tread. Before I let you go, we know that the Chinese economy seems to be...

exhibiting some sign of renewal. I don't know if it's durable or not. Yes, there is still the problem with the property market, but certainly high-tech stocks are telling kind of an enlightening story, perhaps. And I'm curious as to whether or not this is having any ripple effect on Australia's economy right now, the fact that China seems to be doing a little bit better.

Nothing major in terms of signs within the hard economic data yet. But within the soft economic data, we can see that confidence remaining relatively positive in Australia. Domestic rate cuts are helping on the consumer side of things.

But there would be a great deal of concern within business and consumer sentiment, a great hit to business and consumer sentiment, was China to be showing signs of not looking very, very strong or the economy perhaps faltering a bit.

Policy moves from the Chinese authorities to deliver more stimulus are very, very welcome news to Australia. So we're seeing that sort of in the confidence side of things. Whether that translates into the hard economic data, it still remains a bit of a wait and see, I think.

James, thank you so much for taking the time to chat with us as we look ahead to the RBA decision. Bloomberg's James McIntyre there. He covers Australia and New Zealand for Bloomberg Economics. I'm Doug Krisner. You can catch us weekdays for the Daybreak Asia podcast. It's available wherever you get your podcast.

Tom? Thank you, Doug. And that does it for this edition of Bloomberg Daybreak Weekend. Join us again Monday morning at 5 a.m. Wall Street time for the latest on markets overseas and the news you need to start your day. I'm Tom Busby. Stay with us. Top stories and global business headlines are coming up right now.

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