AUSTRALIAN BUDGET: Australia sees 2025/26 budget deficit at AUD 28.3bln (vs AUD 36.8bln projected); sees 2026/27 budget deficit at AUD 31.5bln, 2027/28 deficit AUD 31.0bln; Treasurer says budget helps, rather than harms, the fight against inflation

Australia's updated budget forecasts a smaller deficit than previously projected, which may ease concerns about fiscal sustainability. The Treasurer's assertion that the budget supports the fight against inflation, alongside a moderate CPI outlook, implies a balanced approach to fiscal policy while prioritizing growth. This could influence market sentiment, particularly in fixed income and currency spaces, as it reflects a commitment to managing inflation without aggressive austerity measures.