Davos kicks off this week – the global talkfest with some of the world’s biggest name politicians and business leaders attending. The headline act will be Donald Trump who will appear just 48 hours after he imposed a 10 per cent tariff on goods sent to the US from a number of allies including Denmark, the UK, France, Germany, the Netherlands and three Scandinavian countries. It is part of Trump’s efforts to get Europe to sell Greenland to the US. The tariffs increase to 25 per cent on June 1. There is a two-week delay until the tariffs are introduced, which has become Trump’s typical negotiating period following an announcement. And with Trump there are always negotiations. The tariffs escalate the already charged relationship between the US and Europe.

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News in brief

Prime Minister Anthony Albanese has backed down from trying to ram through legislation today and tomorrow that combined gun reform with contentious racial vilification and hate speech provisions, saying it was clear the Greens and Coalition will not support the bill in its current form.

Holiday makers into Australia surged late last year, while migration fell back, according to the Australian Bureau of Statistics. Chinese tourists are back in the top three ranking, along with New Zealanders and British visitors. There was also a surge in visitors from the US, Japan and South Korea.

4.7 million social media accounts have been de-activated under the government social media ban for under 16-year-olds.

The Australian Open tennis tournament, known as the Happy Slam, has kicked off in Melbourne with around 1.2 million people expected to view the competition for $111.5 million in prize money.

The survival rate for cancer patients is now 70 per cent, five years after diagnosis, up from just 50 per cent in the mid 1970s, meaning cancer is becoming more of a treatable chronic disease, rather than a death sentence.

Fear-o-meter

AMP Chief Economist Dr Shane Oliver on the year ahead:

Global and Australian share returns are expected to slow further in the year ahead to around 8 per cent. Stretched valuations in the key direction setting US share market, political uncertainty associated with the midterm elections and AI bubble worries are the main drags, but returns should still be positive thanks to Fed rate cuts, Trump’s consumer friendly pivot and solid profit growth.

A return to profit growth should also support gains in Australian shares even though the RBA may have finished cutting rates. Another 15 per cent or so correction in share markets is likely along the way though.

Bonds are likely to provide returns around running yield.

Australian home price growth is likely to slow to 5-7 per cent due to poor affordability, rates on hold with talk of rate hikes and APRA’s move to ramp up macro prudential controls.

Cash and bank deposits are expected to provide returns around 3.6 per cent.

Source: AMP

Fear & Greed Q+A today

On the week ahead in the economy, and the economic indicators that will have the greatest impact on Australian businesses this year:

 

“The most important thing for businesses is economic activity. You want people clicking on your website, knocking on your door, ringing up and ordering stuff from you. That comes back to confidence. When consumers feel pressure from cost of living or fear about job security, they hunker down and don’t spend. Interest rates are likely on hold for most of 2026 in my view, which isn’t a bad outcome. Inflation pressures aren’t as acute as they were two years ago. What businesses really need is people spending at a decent, sustainable pace.”

Greed-o-meter

The Australian Open is underway in Melbourne, and if you've ever considered becoming a professional tennis player, now's a good time: the prize pool for the tournament stands at $111.5 million, up from $96.5 million last year.

Source: Australian Open

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