Markets watch budget impact on consumers

The impact of the federal budget on consumer confidence and key wages and jobs data will be the focus for Australian markets this week.

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Economists will be watching Tuesday’s weekly ANZ-Roy Morgan consumer confidence reading and the monthy Westpac-Melbourne Institute consumer sentiment index on Wednesday for any boost from last week’s federal budget.

“The sentiment gauge will attract more than the usual attention given it will be the first reaction of Aussie consumers to the federal budget,” CommSec senior economist Savanth Sebastian said of the weekly survey.

Economists expect Wednesday’s March quarter wages data to show growth of 0.5 per cent, leaving annual growth at a record low of 1.9 per cent.

“While the annual growth rate is the lowest on record, it still remains marginally ahead of underlying growth of consumer prices,” Mr Sebastian said in a research note.

“The real wage gains alongside the low interest rate environment on record will serve to support consumer spending for the rest of 2017.”

The market consensus is for Thursday’s April employment data to show a gain of 5000 jobs and the unemployment rate remaining steady at 5.9 per cent.

However, RBC Capital Markets and Commonwealth Bank of Australia economists expect some consolidation after a surge in new jobs in March, forecasting a flat jobs outcome for April and the unemployment rate to tick down to 5.8 per cent.

“A likely small drop in unemployed persons and some retracement in the participation rate after several monthly gains suggest that the unemployment rate may edge a little lower to 5.8 per cent,” a RBC report said.

Also out this week are March housing finance data and the minutes of the Reserve Bank of Australia’s last board meeting, which economists do not believe will offer any new insights.

The Australian share market may open trading on Monday flat or slightly weaker after US stocks edged 0.1 per cent lower on Friday.

McMahon ready for Wallabies: Rebels coach

He has only played 40 minutes of rugby this season but Melbourne Rebels coach Tony McGahan says Sean McMahon will be ready for the Wallabies’ June Tests.

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The 22-year-old made his long-awaited return to AAMI Park after finally overcoming ankle surgery followed by a knee injury.

He came off the bench at blindside flanker for the Rebels’ second half with his leg drive pumping up his team for a late surge.

They ultimately fell short 29-24 when Reds skipper Samu Kerevi scored a last-ditch try, but McMahon played with his usual aggression and tenacity.

“He was great,” McGahan said of his back rower.

“He’s an important player for us with what he brings with effort and attitude, he’s a real fierce competitor.

“He was absolutely busted in the last seven or eight minutes but to get through 40 minutes after being out for seven months was a fair effort.”

The coach added McMahon would be ready for the three June Tests, when Australia take on Fiji, Scotland and Italy.

“He’ll be fine,” McGahan said.

The Rebels have only managed one win this season and while injuries have contributed to their poor run, they have also turned in some shockers.

While he plumped for McMahon, the coach thought the results would count against the Rebels at the selection table, who had a club-record six players winning Test caps last year.

Hooker James Hanson, lock Lopeti Timani, prop Toby Smith and centre Sefa Naivalu could all miss out this season.

“I’ve got absolutely no doubt,” said McGahan, a former Wallabies assistant coach.

“That’s a proven fact, that individuals can still do all their things but sometimes you suffer at the fate of your team and their performances.”

Q & A on global cyber attack

THE GLOBAL CYBER ATTACK: THREE QUESTIONS AND THREE ANSWERS

A massive hack crippled computers across the world on Friday in what was described by experts as a cyber attack unprecedented in scale.

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Q: What happened?

A: Tens of thousands of computers in homes, businesses and government agencies were infiltrated by malicious software that encrypted and blocked access to content until users paid between $US300 ($A406) and $US600 ($A812) in the digital currency bitcoin. Nearly 100 countries were hit in the attack.

Q: What accounts for its scale?

A: Hackers exploited vulnerabilities in the most widely used operating system in the world: Microsoft Windows. The software giant issued a fix in March to correct the security flaw, but computers that did not run the update were susceptible to infection.

The highest-profile organisation to fall victim to the cybercrime was Britain’s National Health Service, which uses the 15-year-old Windows XP operating system on its computers.

Windows XP is so old that Microsoft was no longer offering free software updates for it. The company announced on Saturday that it was reversing that policy.

Q: How does the malware enter the computer?

A: The cyber weapon involved in the attack is malware known as Wanna Decryptor or WannCry. It infiltrates computers by way of links and attachments in spam emails.

Security experts say unknown hackers took advantage of tools stolen from the US National Security Agency. Portions of the spy agency’s sophisticated cyber arsenal have been leaked online in recent months.

Awesome foursome join Fanning, Parkinson

There will be six Australians in the fourth round of the Rio Pro after another successful day at Saquarema.

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Adrian Buchan, Matt Wilkinson, Julian Wilson and Owen Wright all prevailed in their third-round encounters to join former world champions Mick Fanning and Joel Parkinson in advancing in Brazil.

Saturday’s day five opened with an upset as Brazilian 20-year-old Yago Dora upset championship leader John John Florence of Hawaii.

South Africa’s Jordy Smith was next up, dispatching of hometown hope Jadson Andre in a close encounter.

Fellow Brazilian Caio Ibelli laid an early marker for Buchan with a 7.07, but he was unable to back it up as the Australian finished with 13.16.

It was an all-Australian affair in heat nine with Wilkinson proving too strong for Josh Kerr before Kanoa Igarashi of the United States defeated Filipe Toledo.

Wilson accounted for Frederico Morais despite the Portuguese recording the highest score of the day with 9.20 before a consistent Wright posted the session’s highest total.

His total of 17 won the final heat of the men’s session over Nat Young, the American named for the former Australian world champion of the same name.

“I feel like that was always going to be a really strong heat,” Wright said.

“I feel like we’ve got similar game plans, we like to stick to what we know. We don’t go to the air too much, when we do it’s more of a risk.

“I felt like we were there trading right-handers and I just thought I’ve got to show the judges something different and go left and that was the difference for me.”

Warner hits out as Mumbai hit the summit

Australian Test vice-captain David Warner’s unbeaten 69 set up an eight-wicket win for Sunrisers Hyderabad in the Indian Premier League and with it boosted their hopes of a top-two finish.

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Warner carried the bat in his 52-ball knock, steadying the ship after the early wickets of opening partner Shikhar Dhawan (18) and Australian teammate Moises Henriques (4) in the third over.

The opener shared an unbroken 133-run stand with Vijay Shankar to successfully chase down Gujarat’s total of 154.

Ishan Kishan top-scored for the Lions with 61 after sharing a 111-run opening partnership with Dwayne Smith. Big-hitting Australian Aaron Finch was dismissed for 2 by Rashid Khan in the 14th over as a late collapse saw Gujarat all out for 153 with four balls remaining in their innings.

James Faulkner fared little better than Finch, making eight before falling to Mohammed Siraj.

Henriques’ solitary over was expensive, going for 12 runs while Siraj (4-32) was the best of the Sunrisers’ bowlers.

In Saturday’s second IPL clash Mumbai Indians secured top spot on the ladder with a nine-run win over Kolkata Knight Riders.

Chris Lynn helped Kolkata, chasing 174 for victory, to recover after losing his opening partner without scoring on the fourth ball of Tim Southee’s opening over.

Mitchell Johnson had the next wicket when he had Gautam Gambhir caught on 21.

Lynn made 26 off 14 balls before being caught off Vinay Kumar.

Consistent wickets saw the Knight Riders’ run rate taper off somewhat and they finished on 8-164.

Mumbai had posted 5-173, headlined by Ambati Rayudu’s 61.

Rafael Nadal ends Novak Djokovic hoodoo

Rafael Nadal ended a seven-match losing streak against Novak Djokovic in emphatic fashion by thrashing the world No.

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2 to reach the final of the Madrid Open and move within a step of a third consecutive claycourt title.

The Spaniard, who won 6-2 6-4 on Saturday, will be aiming for a fifth Madrid title when he meets Austrian Dominic Thiem in Sunday’s showpiece.

World No.9 Thiem beat Uruguayan Pablo Cuevas 6-4 6-4 in the other semi-final.

Nadal made a dream start in the 50th meeting between the great rivals, winning every point in the first game to break Djokovic, with the home crowd wildly celebrating his first point – a potent return which the Serbian could only hit into the ground.

Djokovic won the last meeting between the pair in the quarter-finals of the Rome Masters a year ago, and Nadal had not beaten the 12-times grand slam winner since the 2014 French Open final.

“The circumstances nowadays are completely different compared to those seven matches that occurred before. The last two years perhaps haven’t been my best two years. They were really good years for Novak,” Nadal told a news conference.

However, the Spaniard added: “It’s one more match. What’s important to me is to make it to another final.

“As years go by, depending on the type of victories, (they) can fulfil you a little bit more or less. The most important thing is the titles, not the opponents that you have beaten.”

Defending champion Djokovic, who cut ties with long-time coach Marian Vajda and his staff the week before the tournament in a bid to reverse his downward trajectory of results, surrendered his serve again in the third game, and Nadal held to go 4-0 up.

Real Madrid greats Raul and Cristiano Ronaldo were among those watching in the stands in the Caja Majica on a scorching day in the Spanish capital as Nadal continued his rampant start to the year.

The Spaniard finished off the first set in 40 minutes and again broke the struggling Djokovic in the opening game of the second.

The world No.2 broke back in the fourth to tie the set at 2-2 and celebrated by punching the air.

It proved to be a brief respite for the Serbian, however, as Nadal broke him again in the next game and held to restore his two-game lead.

He missed two match points on his serve and then had to save a break point before taking the contest at the third time of asking to reach the Madrid final for the eighth time.

On Sunday, Nadal will look to add to his recent triumphs in the Monte Carlo Masters and the Barcelona Open.

Djokovic said he was encouraged by his performance.

“It was a positive week, a positive experience. I take, as I say, more positives than negatives into the next week in Rome,” he said.

Superb Saracens retain European title

Saracens have delivered another superb display of rugby skill and mental resilience to eventually overcome the challenge of Clermont Auvergne 28-17 and retain the European Champions Cup after a gripping final at Murrayfield.

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The London club started strongly with two tries in the first 22 minutes and looked as they were going to cruise to victory but Clermont fought back to ensure there was only a point in it going into the last 10 minutes.

Saracens, however, as they have so many times before, held their nerve under pressure in a superb atmosphere as Alex Goode broke through for the killer third try in the 73rd minute which Owen Farrell converted from the touchline.

The victory made Saracens the fourth team to retain Europe’s premier club title after Leicester, Leinster and Toulon while perennial bridesmaids Clermont, who have lost 11 of their 12 French championship finals, became the first to play in three finals and lose them all.

“The win felt different to last year, it’s a relief. There was a lot of satisfaction from this,” said Saracens halfback Richard Wigglesworth.

“We could easily have lost our heads being so dominant and not scoring but we didn’t. We want to keep building but we’ve put down a marker now.”

Saracens, now unbeaten in two full seasons in the competition, will now turn their attention to the double – they face Exeter away in the Premiership semi-finals next week.

Clermont, beaten by Toulon in the 2013 and 2015 finals, will have to regather for another assault on the French championship, where they currently lie second.

“We gave it our all out there – we might have left it a bit late in the first half to start playing but we had a good fightback in the second half and we’re proud of that effort,” Clermont fullback Scott Spedding said.

“We are absolutely gutted. We don’t know what we’re missing but hopefully one day it turns our way.”

Labor unsure how to split $22b for schools

Labor has promised to give schools an extra $22 billion should it win government but won’t detail how the money will be divvied up until it’s talked to everyone in the sector.

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Opposition Leader Bill Shorten used his budget reply speech to confirm the party would find the $22 billion it says the government has stripped out of education funding over the next decade.

Shadow treasurer Chris Bowen said on Sunday there were still more announcements to come.

“We’ve announced the funding envelope over the decade,” he told Sky News.

“In terms of sectoral approach and the funding profile, we have consultations to do with the states, with the Catholic education office, with educators, P&Cs, more broadly.”

However, the government looks likely to be able to enshrine its new funding approach in legislation after the Greens indicated they intend to seize the opportunity to create a fairer system.

The commonwealth will increase its schools funding from $17.5 billion in 2017 to $30.6 billion in 2027.

But that boost is about $22 billion less than what Labor planned to give schools over the same decade when it was in power – although it’s more than the coalition has indicated in any of its budgets since 2014.

Labor’s pledge to restore the funding is over the same timeframe as the government’s plan, up to 2027.

But with the next federal election not due until early 2019, it’s unclear what would happen to the $3.6 billion difference between the government’s plan and Labor’s in 2018 and 2019.

Greens education spokeswoman Sarah Hanson-Young said it was time for Labor to get real about the state of funding.

“Gonski years five and six (in 2018 and 2019) are already gone. It was wrong for the Liberals to cut them but the Senate can’t bring them back, they’re not in legislation,” she told Fairfax Media.

She indicated the Greens want more money to go to the neediest schools faster.

The legislation before parliament outlines the government’s intention for the commonwealth to pay 20 per cent of a base per-student funding level, plus loadings for disadvantage, to public schools and 80 per cent to private schools.

It says it’s up to the states to make up the rest, and the legislation will force state governments to sign on to a new agreement on schooling.

No future increase in bank levy: Morrison

Scott Morrison says the bank levy announced in last week’s budget is permanent but he has no plans to raise it any further in the future.

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The 0.06 per cent tax on the big four banks and Australia’s largest investment bank, Macquarie, will raise just over $6 billion to help towards budget repair and was the biggest surprise in the treasurer’s annual statement.

The UK has a similar tax on banks but has raised it several times since its introduction.

“We have no plans to do that whatsoever,” Mr Morrison told ABC television on Sunday.

“We have set it at the levy we think is appropriate and we think is fair.”

The bank chiefs are furious and are threatening to pass on the cost of the levy to their customers and shareholders.

But Mr Morrison insists the banks can absorb the impost.

“If banks think the way to build shareholder value is to fleece their customers then I don’t think that is a very sound business strategy,” he said.

He said the levy was small when compared to the 25 basis-point changes in the cash rate made by the Reserve Bank and at a time at a time when they are enjoying a 20-40 basis point advantage over smaller banks when they raise money in the financial market.

“To suggest this is somehow the end of financial civilisation as we know it is one of the biggest overreaches in a whinge about a tax I have ever seen,” Mr Morrison said.

But shadow treasurer Chris Bowen does not believe the levy is about competition, given the government has only just sought a review on the issue through the Productivity Commission two years after it was recommended in the Murray review of the financial system.

However, Labor does support the levy and, like the government, would make it permanent.

But Mr Bowen believes it was a last minute decision to drop it into the budget because the government was short on cash.

He said the government had not consulted the sector nor taken advice from the Council of Financial Regulators about its impact.

“It was a desperate measure because they were short of cash so they said I know what we’ll do, we’ll dump a bank levy in,” Mr Bowen told Sky News.

Australian and Indonesian designers strengthen ties through fashion

Australian designer Jenny Kee is an 80s fashion icon.

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Decades later she’s still creating bold prints, but this time she’s got her eyes set on the market of Australia’s northern neighbour.

Ms Kee told SBS World News: “My clothes are about colour and joy and love of all the Australian imagery that can be used in subtle or non-subtle ways.”

Watch: Jenny Kee see similarities between her and Indonesian fashion

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Meanwhile, Indonesian fashion designer Tuty Adib wants to sell her creations to Australia.

Ms Tuty designs modest fashion, which she hopes has a universal appeal.

“My fashion is not just for Muslims or Muslim women, it’s for everyone who wants to wear modest fashion.”

The designers featured their collections at the ‘Indonesia Beautiful’ fashion show organised by the Consulate General of Indonesia in Sydney.

Watch: Tuty Adib believes her modest fashion has a universal appeal

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It follows a discussion this year between the two countries’ leaders about the importance of collaborating in the creative industries.

In February, Australian Prime Minister Malcolm Turnbull and Indonesian President Joko Widodo agreed to explore the economic potential of the fashion industry.

Consul General Yayan Ganda Hayat Mulyana told SBS World News “the creative sector is booming and becoming the pillars of both countries”.

Watch: Indonesian Consul General supports fashion ties

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Australia’s creative industries are worth $90.19 billion in turnover to the national economy and employ more than 600,000 Australians. The fashion industry constitutes $12 billion.

Indonesia is the 12th largest textile exporter to Australia, valued at US$500 million. But that has the potential to change.

According to a 2016 McKinsey report, the global fashion market at US$2.4 trillion is projected to accelerate by up to 3.5 per cent in 2017.

“I would like to bring Australia and Indonesian designers to collaborate to tap into the potential of the global market,” Mr Yayan said.

“We [Indonesia] have creation, we have motifs, we are rich with cultural motifs, Australia has technology, and management skills.”

In June, Indonesia and Australia will enter the seventh round of negotiations towards the Indonesia-Australia Comprehensive Economic Partnership, which promises to open new markets and business opportunities.  

Watch: Introducing heritage-listed batik to Australia

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