Australia should go further in strengthening ties with Indonesia, the prime minister says, using a visit to Jakarta to push defence links with the Asian power.

Anthony Albanese held formal talks with Indonesian President Prabowo Subianto on Thursday in the first overseas trip of his second term in office.

Strengthening defence agreements, boosting trade and dealing with tensions in the Indo-Pacific were all on the agenda during the bilateral meeting in the Indonesian capital.

While Australia and Indonesia signed defence agreements in the past, Mr Albanese said it was only a starting point for the relationship.

“I do not see this agreement, though, as the last step, just the next step,” he told reporters in Jakarta.

“I want us to aim higher, go further and work even more closely together.

“I am here in Indonesia because no relationship means more to Australia than than this one.”

The prime minister was given a spectacular welcome at the presidential palace, with horse-riding soldiers leading his limousine past hundreds of flag-waving school children.

Ahead of the formal talks, Mr Subianto dropped by Mr Albanese’s hotel for a quick catch up.

The prime minister stressed Indonesia remained a significant partner in the Indo-Pacific as tensions in the region rose.

“The future of our region is shaped by shared opportunity and secured through collective responsibility,” he said.

“The deepening of our trade with Indonesia and the strengthening of investment in Indonesia is natural and vital.”

Efforts to strengthen the relationship were dependent on both countries working together to turn “potential into concrete progress”, the prime minister said.

“All of us, government, business and civil society, need to demonstrate greater engagement and ambition.”

Reports emerged during the federal election campaign that Russia requested to operate long-range military aircraft from an Indonesian base.

Mr Albanese said every senior official in the Indonesian government reassured Australian counterparts it wasn’t happening.

“We make very clear our position when it comes to Russia around the world, be it the brutal invasion of Ukraine, its interference in cyber security issues as well, its tolerance of criminal organisations that have been involved in that, are an anathema to our values,” he said.

“We’ll continue to stand up for Australian values.

“That is something that we’ll do both domestically but right around the world.”

The prime minister is travelling with Foreign Minister Penny Wong and Home Affairs Minister Tony Burke as part of the Australian delegation.

Security experts have warned Australia to heed Indonesia’s concerns about the AUKUS deal and growing US military presence in the region, which Jakarta viewed as increasing strategic competition.

The prime minister will fly to Rome after his trip to Jakarta to attend Pope Leo XIV’s inauguration mass.

He will return to Australia next week, after he sits down with Singapore Prime Minister Lawrence Wong.

Larissa Waters promises to push for stronger climate action and “politics with heart” after being chosen to lead the federal Greens.

The senator triumphed over South Australian Sarah Hanson-Young and Mehreen Faruqi from NSW, who will stay on as deputy.

Senator Waters ran for the leadership unopposed after being selected through consensus.

“I am just so thrilled to have had the support of my colleagues to be the leader of the Australian Greens,” she told reporters on Thursday.

“We need a parliament that actually delivers for people and has the courage and the boldness and the heart.

“So I’m calling today for a progressive parliament and politics with heart.”

She is the first person from Queensland to be appointed leader.

The Greens lost three lower house seats at the election and failed to pick up any extras.

However, they are confident of wielding influence in the Senate, where the party holds the balance of power.

Walking out of the meeting arm-in-arm with her leadership team, Senator Waters called on the Albanese government to engage with the minor party to improve the lives of Australians.

“People elected us to get shit done,” she said.

Her second-in-command promised the Greens would use their leverage in the upper house to “demand more, not less”.

“To the right wing media, to the billionaires, to the big corporations and to the Albanese government … we are not going to take a step backwards on action, on climate, on the environment, on housing and for justice,” Senator Faruqi said.

Labor has at least 28 seats in the Senate and with the support of the Greens has the numbers to get legislation through the upper house.

Senator Hanson-Young will keep her role as the Greens’ manager of business, while Tasmanian Nick McKim will be party whip.

Adam Bandt, who had led the Greens since 2020, lost his seat of Melbourne to Labor at the May 3 poll.

The shock defeat ended Mr Bandt’s 15-year career in federal parliament.

Senator Waters said her former leader was desperately missed and would be welcomed back into the parliamentary party with open arms one day.

“I’m a different person to Adam. I take a different approach … but I lead a really strong team,” she said.

“We will be firm but constructive under this government and any future government.”

Britain’s economy unexpectedly grew in March to push up output over the first quarter of 2025 by the most in a year, according to official data that has been welcomed by finance minister Rachel Reeves.

Gross domestic product expanded by 0.2 per cent in March from February. 

Economists polled by Reuters had mostly expected a flat reading of 0.0 per cent.

Between January and March, gross domestic product grew by 0.7 per cent, the Office for National Statistics said on Thursday. 

That was above the 0.6 per cent growth forecast in the Reuters poll and which had also been expected by the Bank of England.

The ONS said growth was largely driven by the services sector although production grew significantly too after a period of decline. 

Business investment grew strongly.

“Today’s growth figures show the strength and potential of the UK economy,” Reeves said in a statement. 

“In the first three months of the year, the UK economy has grown faster than the US, Canada, France, Italy and Germany.”

She and Prime Minister Keir Starmer are trying to kickstart Britain’s sluggish economy via increased spending on infrastructure and other reforms that they hope will boost investment.

However, the central bank said last week it expected the growth jump in the January-to-March period would prove temporary with output likely to expand by one per cent in 2025, speeding up only slightly to 1.5 per cent growth in 2027.

US President Donald Trump’s trade tariffs are expected to slow the global economy while British businesses have said they will be hit by big rises in employment taxes ordered by Reeves and in the minimum wage.

So far, Britain’s consumers have remained largely unfazed by worries about the outlook for the economy. 

Data published this week showed a rise in their spending over March and April.

The Reserve Bank is still expected to cut rates after more signs of surprising resilience in the labour market, but hopes of further mortgage relief have been pared back.

The unemployment rate held steady at 4.1 per cent in April, in line with consensus predictions, but the Australian Bureau of Statistics also recorded an increase of 89,000 jobs in the economy, smashing market expectations.

The labour force print was the last major data release before the Reserve Bank of Australia board decides whether to cut the cash rate from 4.1 per cent on Tuesday.

The money market had priced the probability of a 25 basis point cut at 90 per cent but lowered the odds to about 80 per cent following the ABS release, IG market analyst Tony Sycamore said.

“Today’s jobs report has provided yet another reminder of the resilience of the Australian labour market, which was a factor in the RBA recently revising lower its unemployment forecasts to 4.2 per cent from 4.5 per cent for the end of 2025,” he said.

Strong jobs data and an easing in trade tensions between the US and China this week have led the money market to reduce its forecast to around 75 basis points of cuts by year end, from 100 basis points on Monday.

The unemployment rate has been historically low in recent years, hovering around the 3.9 to 4.1 per cent range since August 2024. 

RBA governor Michele Bullock has expressed concerns that tightness in the labour market could cause price growth to re-accelerate.

But Mr Sycamore still expects the central bank to cut the cash rate, given underlying inflation is back in the target band and lingering tariffs continue to risk impacting global growth. 

Employment growth was driven by more women entering the workforce, with the participation rate increasing to 67.1 per cent.

Freshly minted employment Minister Amanda Rishworth welcomed the record high level of women’s workforce participation.

“Reducing the gender pay gap has been a critical focus of our government,” she said.

JP Morgan chief economist Ben Jarman also tipped a cut but he said it wouldn’t be a “slam-dunk case” for the board.

“The economy is picking up gradually while inflation converges to the target mid-point, a soft-landing that justifies a relatively gradual glide path toward neutral,” he said.

NAB economists still predict the RBA to deliver a jumbo 50 basis point cut, although the bank’s senior markets economist Taylor Nugent said the risk to the economy of tariffs has scaled back in recent days.

Wages data this week revealed a stronger-than-expected rise in the March quarter but this was driven by changes to industry awards and enterprise agreements.

Slowdown in growth in individual arrangements, which provided a more relevant indicator of how the business cycle was influencing wages costs, indicated the labour market was loosening, CBA senior economist Stephen Wu said.

Thursday’s data confirmed the jobless rate remained below the central bank’s prediction of 4.2 per cent for the June quarter.

The RBA will release updated economic forecasts in its Statement on Monetary Policy on Tuesday. 

HSBC chief economist Paul Bloxham said recent local growth indicators have been slightly weaker than expected, strengthening the case to cut.

CommBank’s Household Spending Insights index, released on Thursday, continued to show modest growth, rising 0.2 per cent in April.

Larissa Waters has been appointed to lead the Greens after the minor party lost three seats and its captain at the federal election.

The Queensland senator triumphed over South Australian Sarah Hanson-Young and Mehreen Faruqi from NSW.

Adam Bandt, who had led the Greens since 2020, lost his seat of Melbourne to Labor at the May 3 poll.

The shock defeat ended Mr Bandt’s 15-year career in federal parliament.

His colleagues met in Melbourne on Thursday as they began to pick up the pieces.

The Greens lost three lower house seats and failed to pick up any extras at the election.

However, they are confident of wielding influence in the Senate, where the party holds the balance of power.

Tim Read, who represents the Greens in the Victorian parliament, wants to focus on the positives.

He was encouraged by a close result in the seat of Wills, which the Greens tried to snatch from Labor.

“That gives me confidence that there is growing support for the Greens,” he told AAP.

“I’m also impressed by our increased Senate vote.

“The fact that the Greens senators have proven to retain their popularity and increased it, shows we’ll do well whoever is chosen.”

The Greens are left with the Queensland seat of Ryan and 11 senators following the election.

Labor has at least 28 seats in the Senate and with the support of the Greens has the numbers to get legislation through the upper house.

The chances of a second interest rate cut have been pared back after the economy produced thousands of new jobs, in a further sign of a robust labour market. 

The unemployment rate held steady at 4.1 per cent in April, as was widely expected, but the Australian Bureau of Statistics also recorded an 89,000 rise in employment, smashing financial market expectations.

The labour force print is the last major data release before the Reserve Bank of Australia board announces its next decision on interest rates on Tuesday.

The money market lowered the probability of a 25 basis point cut to about 80 per cent, from 90 per cent before the ABS release, IG market analyst Tony Sycamore said.

“Today’s jobs report has provided yet another reminder of the resilience of the Australian labour market, which was a factor in the RBA recently revising lower its unemployment forecasts to 4.2 per cent from 4.5 per cent for the end of 2025,” he said.

Strong jobs data and an easing in trade tensions between the US and China this week have led the money market market to reduce its forecast to 73 basis points of cuts by year end, from 100 basis points on Monday.

The central bank’s cash interest rate currently stands at 4.10 per cent.

The unemployment rate has been historically low, hovering between the 3.9 to 4.1 per cent range since August 2024. 

RBA governor Michele Bullock has expressed concerns that tightness in the labour market could cause price growth to re-accelerate.

But Mr Sycamore still expects the central bank to cut the cash rate on Tuesday, given underlying inflation is back in the target band and lingering tariffs continue to risk impacting global growth. 

Employment growth was driven by more women entering the workforce, with the participation rate increasing to 67.1 per cent.

“The participation rate for 35-44 year olds had the largest annual growth, up 1.9 percentage points to 88.3 per cent,” ABS head of labour statistics Sean Crick said on Thursday.

Female employment growth of 65,000 was dominated by gains in full-time workers, which rose 42,000.

Oxford Economics Australia head of macroeconomic forecasting, Sean Langcake, said the surge in employment was likely to be short-lived, given it can be partly explained by temporary jobs related to the federal election.

The RBA’s preferred measure of inflation – the trimmed mean – fell back into target at 2.9 per cent in April, but the central bank remains concerned tightness in the labour market could cause price rises to accelerate again.

JP Morgan chief economist Ben Jarman also tipped a rate cut but he said it wouldn’t be a “slam-dunk case” for the board.

“The economy is picking up gradually while inflation converges to the target mid-point, a soft-landing that justifies a relatively gradual glide path toward neutral,” he said.

Wages data released on Wednesday revealed a stronger-than-expected rise in the March quarter but this was driven by changes to industry awards and enterprise agreements.

Slowdown in growth in individual arrangements, which provided a more relevant indicator of how the business cycle was influencing wages costs, indicated the labour market was loosening, CBA senior economist Stephen Wu said.

Thursday’s data confirmed the jobless rate remained below the central bank’s prediction of 4.2 per cent for the June quarter.

The RBA will release updated economic forecasts in its Statement on Monetary Policy on Tuesday. 

Several economists have lifted their forecasts for peak unemployment since US President Donald Trump’s tariff announcements sparked expectations of weaker economic growth.

AMP economists Diana Mousina and My Bui expect the unemployment rate to eventually climb to 4.5 per cent.

“(This) suggests that there will be some further downward pressure on wages growth, which we expect to slow towards three per cent over the next 12 months,” they said.

Stocks struggled for direction on Thursday while the dollar stumbled as the euphoria from market tailwinds earlier in the  week fizzled out, with traders looking to US data later in the day for further catalysts.

US Treasury yields were elevated and the benchmark 10-year yield rose to a one-month top, in part due to worries over President Donald Trump’s budget package that would add trillions of dollars to the US debt.

Investors were greeted with a plethora of good news earlier this week from a US-China trade-war truce to a raft of headline-grabbing investment deals from the Middle East during Trump’s Gulf tour, in moves that breathed new life into battered global stocks.

But most of the optimism died down by Thursday, leaving MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed and Wall Street futures slightly lower after notching marginal gains during the overnight cash session.

“We’ve had a huge party, everyone’s hung over, and now we’re just recuperating and waiting for the next big party,” said Tony Sycamore, a market analyst at IG.

While the trade deal between the US and China gave markets some reason to cheer, the absence of clarity over Trump’s trade policies has left markets with a sense of lingering uncertainty over the global economic outlook.

Investors were also waiting for further details of trade deals with other countries.

“I get the feeling there is a little bit of a reluctance to take the market higher from here,” said Sycamore.

“I don’t think foreign investors are going to be rushing back to that overweight position they’ve had in US equities because of that confidence that has been shaken during the events over the past couple of months, both from tariffs and lawmakers.”

Nasdaq futures were down 0.02 per cent while S&P 500 futures fell 0.13 per cent. EUROSTOXX 50 futures eased 0.09 per cent while FTSE futures ticked up 0.08 per cent.

In Japan, the Nikkei was down 0.9 per cent. China’s CSI300 blue-chip index dipped 0.23 per cent while Hong Kong’s Hang Seng Index was little changed.

For now, investors were awaiting Thursday’s data on US retail sales and earnings from Walmart, a bellwether for the US retail industry, for a check on the pulse on consumer sentiment.

A disappointing outcome could feed fears of a recession in the world’s largest economy, which would be a drag on markets.

Federal Reserve Chair Jerome Powell is also scheduled to speak later in the day, where the focus will be on any clues regarding the outlook for US rates.

In currencies, the dollar was struggling to extend its strong gains made at the start of the week, falling 0.44 per cent against the yen and 0.3 per cent against the Swiss franc to 146.13 and 0.8397, respectively.

Moves against the Korean won were particularly choppy for a second straight day, after news that South Korea’s deputy finance minister Choi Ji-young met with Assistant Secretary for International Finance at the US Treasury, Robert Kaproth, to discuss the dollar/won market on May 5.

A report from Bloomberg that Washington is not negotiating for a weaker dollar as part of tariff talks helped calm currency markets, but concerns that the US administration is pursuing just such a strategy continue to keep investors wary.

The latest moves in the won were reminiscent of the unprecedented surge in the Taiwan dollar earlier this month.

The dollar was last down nearly 0.5 per cent against the won at 1,400.70.

“While details are scarce and such discussions may be part of ongoing dialogue, it puts renewed focus on the scope for undervalued trade surplus currencies to appreciate in a weaker dollar environment,” said analysts at Goldman Sachs in a note.

The Aussie jumped after data showed Australian employment blew past expectations in April. It was last up 0.3 per cent at $US0.6448 ($A0.9981), extending gains from earlier in the session.

Elsewhere, oil prices slid on expectations of a potential US-Iran nuclear deal, while an unexpected build in US crude oil inventories last week heightened investor concerns about oversupply.

Brent crude futures were down 1.8 per cent to $US64.93 ($A100.51) per barrel. US crude fell 1.9 per cent to $US61.95 ($A95.89) a barrel.

Spot gold was little changed at $US3,179 ($A4,921) an ounce.

Anthony Albanese will push for closer defence ties with Indonesia when he holds formal talks in Jakarta with President Prabowo Subianto.

The prime minister arrived in the capital on Wednesday for his first bilateral meeting with a world leader since winning a second term in office at the federal election.

While the formal one-on-one meetings are taking place on Thursday, the prime minister was greeted by Mr Subianto at his hotel on Wednesday night.

Mr Albanese said the informal discussions were a sign of the closeness between the two countries, and he was looking to strengthen the partnership during the visit.

“We had a really good chat about elections, about the state of the world, and it was very it was a great honour, and we certainly saw it as such,” he told reporters in Jakarta on Thursday.

“It said something about the depth of the relationship and the extent of the friendship and warm relationship between our two nations.”

The prime minister said defence partnerships, global security and trade would be the focus of discussions between the two leaders.

“We’re talking about further strengthening our defence ties, and also how we put our economic partnership, how we can build on that with investment,” he said.

“We’re building our capability and defence arrangements and security arrangements with countries like Indonesia, Papua New Guinea, the Philippines, and other countries in our region.”

Reports emerged during the election campaign that Russia had requested to operate long-range military aircraft from an Indonesian base.

Mr Albanese said every senior official in the Indonesian government had reassured their Australian counterparts it wasn’t happening.

“We make very clear our position when it comes to Russia around the world, be it the brutal invasion of Ukraine, its interference in cyber security issues as well, its tolerance of criminal organisations that have been involved in that, are an anathema to our values,” he said.

“We’ll continue to stand up for Australian values, and that is something that we’ll do, both domestically, but right around the world.”

The prime minister is travelling with Foreign Minister Penny Wong and Home Affairs Minister Tony Burke as part of the Australian delegation.

Security experts have warned Australia to heed Indonesia’s concerns about the AUKUS deal and growing US military presence in the region, which Jakarta viewed as increasing strategic competition.

The prime minister will fly to Rome after his trip to Jakarta to attend Pope Leo XIV’s inauguration mass on Sunday.

He will return to Australia next week, after he sits down with Singapore Prime Minister Lawrence Wong on Tuesday.

Anthony Albanese has had an early encounter with Indonesian President Prabowo Subianto ahead of the pair’s formal talks in Jakarta.

The prime minister arrived in Jakarta on Wednesday night for his first bilateral meeting with a world leader since winning a second term in office at the federal election.

While he was due to meet with his Indonesian counterpart for formal bilateral meetings on Thursday, the prime minister was greeted by Mr Subianto at his hotel.

The pair then had a one-on-one meeting, ahead of the formal events on Thursday.

Mr Albanese said the visit to Indonesia would aim to strengthen ties within the Indo-Pacific region.

“Australia and Indonesia are the nearest of neighbours and the closest of friends,” he said on social media.

“Working with President Subianto over the coming years, we will build stronger connections between our two countries.”

Mr Albanese was initially greeted by a guard of honour and Minister for Economic Affairs Airlangga Hartarto when he landed in Jakarta on a RAAF jet on Wednesday night.

He’s travelling with Foreign Minister Penny Wong and Home Affairs Minister Tony Burke as part of the Australian delegation.

The prime minister has already flagged the Australia-Indonesia defence co-operation agreement, signed last August, will be a priority at the talks.

“There’s substantial progress that’s been made already, particularly in the area of maritime, and one of the things that we’ll be discussing as well is that progress going forward,” he told reporters in Perth, before leaving for Jakarta.

As Canberra grows concerned over Indonesia’s developing relationship with  Russia and China, Mr Albanese will seek to strengthen his bond with Indonesia’s leader.

Reports emerged during the election campaign that Moscow had requested to operate long-range military aircraft from an Indonesian base.

Mr Albanese said every senior official in the Indonesian government had reassured their Australian counterparts it wasn’t happening.

The prime minister reinforced the importance of the relationship with Jakarta in a phone call with the president, who called to congratulate him on his election win on May 3.

“I want Indonesia to be my first visit. Not Washington, not Beijing, not anywhere else,” Mr Albanese told the president.

Security experts have warned Australia to heed Indonesia’s concerns about the AUKUS deal and growing US military presence in the region, which Jakarta viewed as increasing strategic competition.

The prime minister will fly to Rome after his trip to Jakarta to attend Pope Leo XIV’s inauguration mass on Sunday.

He will return to Australia next week, after he sits down with Singapore Prime Minister Lawrence Wong on Tuesday.

It’s not easy being Green after losing several seats and a party leader at the federal election.

But those who remain are preparing to choose a replacement and reflect on lessons from the campaign.

Adam Bandt, who had led the minor party since 2020, lost his seat of Melbourne on May 3.

The shock defeat ended Mr Bandt’s 15-year career in federal parliament.

His colleagues will meet in the Victorian capital on Thursday as they begin to pick up the pieces.

South Australian senator Sarah Hanson-Young and Mehreen Faruqi from NSW are expected to contest the Greens leadership.

Queensland senator Larissa Waters has not ruled out a tilt.

The Greens lost three lower house seats and failed to pick up any extras at the election.

However, they are confident of wielding influence in the Senate, where the party holds the balance of power.

Tim Read, who represents the Greens in the Victorian parliament, wants to focus on the positives.

He was encouraged by a close result in the seat of Wills, which the Greens tried to snatch from Labor.

“That gives me confidence that there is growing support for the Greens,” he told AAP.

“I’m also impressed by our increased Senate vote.

“The fact that the Greens senators have proven to retain their popularity and increased it, shows we’ll do well whoever is chosen.”

The Greens are left with the Queensland seat of Ryan and 11 senators following the election.

Labor has at least 28 seats in the Senate and with the support of the Greens has the numbers to get legislation through the upper house.