China’s export engine slowed in March as buyers chasing an AI-fuelled future ran into the hard reality of war in the Middle East, which ‌has sparked an energy shock and complicated Beijing’s push to keep growth on track.

Outbound shipments from the world’s second-largest economy grew an ‌annual 2.5 per cent, customs data showed on Tuesday, a five-month low, and slowing from a 21.8 per cent gain in the January-February period. They sharply ‌undershot forecasts for 8.3 per cent growth in a Reuters poll.

Imports rose 27.8 per cent, the best performance since November 2021, compared with a 19.8 per cent increase over January and February and forecasts for 11.2 per cent growth.

March marks the first real test of whether enthusiasm for artificial intelligence – and the chips and servers it demands – could offset gloom unleashed by the global energy shock after Iran’s closure of the ‌Strait of Hormuz, ‌the strategic waterway for ⁠the world’s 20 per cent of oil and gas flows.

China roared into 2026 with ​outbound shipments far outstripping forecasts, powered by tech exports, raising the prospect it could smash last year’s record $A1.7 trillion trade surplus. The Iran war casts doubts about that trajectory.

Even China, long criticised by trading partners for subsidy-backed, cut-price manufacturing, is not insulated from the hit to buyers’ purchasing power as fuel and transport costs rise.

Still, Chinese producers may yet gain ground as buyers seek cheaper options, ⁠said Fred Neumann, HSBC’s chief Asia economist. Decades of commodity stockpiling ‌have also ​helped blunt the impact of raw-material shocks on factory gate prices, he said.

Economists had been divided on how Chinese ​producers fared in the ‌first full month under the shadow of war. 

Mizuho Securities had the highest forecast, projecting a 24 per cent rise, ahead of ​Macquarie Group, which expected a 17 per cent increase. At the other end of the scale, Citigroup forecast growth of just three per cent.

A high base is also likely to be a drag, after Chinese factories rushed shipments a ​year ​earlier to beat US President Donald Trump’s April 2 “Liberation ​Day” tariff deadline.

March factory activity data out of China showed goods exports continued to support growth, but the war in Iran weighed on sentiment as commodity prices rose sharply, lifting input costs.

China’s trade surplus came in at $A72.02 billion in March from $A301 billion ​over January and February.

Trump is expected to visit China for a meeting with Chinese President Xi Jinping in May, ​where analysts see scope for ⁠deals on farm goods and aircraft parts but little chance of movement on flashpoints like ​Taiwan. 

Australia’s second-largest bank has warned that the Middle East conflict is creating challenges for customers, as confidence crashes to its worst level since the pandemic.

Westpac, which will release its first-half results seven days before federal Treasurer Jim Chalmers hands down his next budget, on Tuesday released its latest survey of how Australians are feeling.

The Westpac–Melbourne Institute consumer sentiment index fell 12.5 per cent to 80.1 points in April, as spiking fuel prices and rising interest rates weighed.

It was the worst monthly fall in the survey since the onset of the COVID-19 pandemic, leaving it close to historical lows.

At the same time the bank, which releases its results on May 5, reported that the conflict has dented earnings contributions from one of its internal businesses.

The lower income from the treasury and markets division, driven by volatility, means its net interest margin contribution will fall to seven basis points in the second quarter of fiscal 2026, from 15bp in the first quarter. 

The conflict in the Middle East, which is now entering its seventh week, began on February 28 when the US led an attack on Iran.

Since then, financial markets have been volatile as the price of crude oil has jumped from around $US70 a barrel before the war to peaks well above $US100, leading to higher domestic petrol prices and concerns about fuel supply.

“With the supply shock from the energy market disruption expected to result in higher inflation and higher interest rates, an expected slowing in economic growth will create a more challenging environment for some customers,” Westpac told the Australian stock exchange.

ANZ bank economists on Tuesday raised their price expectations for a barrel of oil to more than $US90 for the rest of the year, up from $US80 previously.

While Westpac said it was well-positioned to support customers amid the ongoing uncertainty, it also flagged its net profit would be reduced by $75 million.

This was due to a “notable item” in the RAMS mortgage business, which it is selling to Pepper Money, KKR and PIMCO. The sale will be completed in the second half of its fiscal year.

The bank is currently expected to post a first-half net profit of around $3.6 billion, which would be a small improvement on the previous corresponding half, according to analysts.

Westpac shares fell by around two per cent in morning trading to $41.64.

Qantas is cutting domestic flights while adding international capacity, as it faces a potential $800 million hit from higher fuel prices.

The changes, which also impact budget subsidiary Jetstar, come after the cost of jet fuel more than doubled since US-Israeli strikes on Iran began in late February, which caused a spike in global oil prices.

The airline group now expects to spend as much as $3.3 billion on jet fuel in the first half of its financial year, up from an original estimate of $2.5 billion.

Qantas is working with the government and jet fuel suppliers to ensure access to the commodity, although it expects no potential disruptions until well into May.

“We are closely monitoring the situation given the ongoing uncertainty in global fuel supply chains,” the airline said on Tuesday.

Given the volatility impacting prices and the global economy, Qantas will cut domestic capacity in the June quarter by around five percentage points.

Most of the reductions will happen on key routes between capital cities, where Qantas flies larger aircraft at higher frequencies, a spokesperson said.

Where possible, Qantas will withdraw capacity at off-peak times to try to minimise the impact on customers.

Qantas and Jetstar customers with future bookings on cancelled flights are being contacted about alternative options or a refund.

Most of those affected will be offered other flights on the same day as their original booking, the airline said.

Air New Zealand, Air India and Delta Airlines have also reduced capacity in recent days, citing surging jet fuel costs.

Qantas, which does not fly to the Middle East, is seeing more demand for international travel to Europe as customers seek alternative routes.

It is redeploying capacity from the US and its domestic network to increase flights to Paris and Rome.

Qantas said it was closely monitoring the situation and had the option to take further action to mitigate fuel cost increases over time.

For now, it’s yet to activate a planned $150 million share buyback and is delaying capital expenditures.

Qantas has hedged 90 per cent of its exposure to crude oil costs but, like most airlines, it remains exposed to the cost of refining crude oil into jet fuel.

Refining costs have soared from around $US20 a barrel in February to a peak of around $US120, Qantas said.

The carrier’s shares were down more than one per cent to $8.91 in morning trading on Tuesday.

Asian stocks advanced while oil prices and the safe-haven dollar fell on Tuesday as the United States said it continued to engage with Tehran ‌to make a deal even as it blocked Iran’s ports after the collapse of peace talks over the weekend.

Sources told Reuters that both sides have ‌left the door open to dialogue and a US official said there was forward motion on trying to get to an agreement.

MSCI’s broadest index of ‌Asia-Pacific shares outside Japan was up 1.0 per cent in early Asia trade, while Japan’s Nikkei and South Korea’s KOSPI rose more than 2.0 per cent each.

Nasdaq futures advanced 0.13 per cent while S&P 500 futures held steady, following an overnight rally on Wall Street, while EUROSTOXX 50 futures gained 0.63 per cent and DAX futures added 0.77 per cent.

“Markets are trading hope, not resolution,” said Charu Chanana, Saxo’s chief investment strategist.

“The failed weekend talks did not produce a deal, but they also did not close the door ‌on diplomacy, and ‌that is enough for equities ⁠to keep pushing higher for now.”

US President Donald Trump on Monday said Iran had “called ​this morning” and “they’d like to work a deal”. Reuters could not immediately verify the assertion.

The US military meanwhile began a blockade of Iran’s ports in a move aimed at putting pressure on Tehran.

Trump has said Washington would block Iranian vessels and any ships that paid such tolls and that any Iranian “fast-attack” ships that went near the blockade would be eliminated.

“The US has actually played that trump card. To me it’s important because they forced the ⁠onus back on Iran to open the Strait without the need to put those ‌boots on ​the ground,” said Tony Sycamore, a market analyst at IG.

“It’s now forced the Iranians back to the drawing board.”

Oil prices slid as expectations for ​a resolution outweighed concerns ‌over supply disruptions, leaving Brent crude futures down 2.7 per cent at $US96.66 ($A136.15) a barrel. US crude futures fell 3.0 per cent to $US96.13 ($A135.40) per barrel.

The dollar fell to a six-week low of 98.328 against a basket of currencies on Tuesday, as buoyant risk sentiment dampened demand for the world’s reserve currency.

That left the euro trading 0.05 per cent higher at $US1.1764 ($A1.6570) while sterling rose to a more than six-week peak of $US1.3514 ($A1.9035).

“The ​US ​and Iran have started to walk down the path ​of coming up to an agreement,” said Joseph Capurso, a strategist at Commonwealth ‌Bank of Australia.

“However, the markets are still facing a global economic outlook that is deteriorating, and I think the risks are high that you get equity markets and credit markets and the like fall again, and that would push up the US dollar against probably all currencies.”

US Treasury yields were little changed, with the two-year yield last at 3.7722 per cent while the benchmark 10-year yield stood at 4.2854 per cent.

The inflationary pulse from the steep rise in energy prices has ​prompted investors to prepare for the possibility that a number of major central banks will lean towards raising rates, marking a sharp reversal from ​expectations prior to the war for rate ⁠cuts or a prolonged pause.

Elsewhere, spot gold was up 0.7 per cent at $US4,771.81 ($A6,721.14) an ounce.

Anthony Albanese will seek further assurances on Australia’s fuel supply during the first prime ministerial visit to Brunei in more than a decade.

The prime minister departed Sydney on Tuesday for a four-day visit to Brunei and Malaysia for talks aimed at safeguarding the flow of petrol and diesel.

Both nations play important roles in Australia’s fuel supply chains, and the trip will build on Mr Albanese’s recent visit to Singapore, another vital exporter.

Along with Foreign Minister Penny Wong, on Tuesday Mr Albanese will visit the Brunei Darussalam-Australia Memorial, where they will lay a wreath.

The site is dedicated to the 127 Australians who were killed and hundreds more who were wounded liberating Brunei and British North Borneo (now Malaysia) from Japanese occupation at the end of World War II.

Mr Albanese is the first Australian prime minister to visit Brunei since Tony Abbott in 2013 for the East Asia Summit.

On Wednesday, he will meet with Brunei’s Sultan Hassanal Bolkiah on Wednesday, where fuel will be high on the agenda.

Swinburne University engineering expert Hussein Dia described the trip as part of regional “fuel diplomacy” efforts aimed at ensuring long-term supply.

Brunei ships about nine per cent of Australia’s diesel while Malaysia is the third-biggest supplier, according to the government.

“I don’t think it’s a sign of immediate shortage or to say ‘give us priority’, it’s really to maintain flow,” Professor Dia said, adding the government was likely “planning for a prolonged period of uncertainty”.

“It just reinforces that we are good partners and we are coming just to seek reassurances and just build on this.”

Brunei also supplies about 10 per cent of urea imports, which is used to make fertiliser.

Australia is Brunei’s largest trading partner, with energy accounting for the largest source.

Job lay-offs could be coming to Australia’s sovereign wealth fund in the latest round of tech-related cost cutting to hit the finance sector.

The Future Fund expects to save $10-15 million in costs in the 2026/27 financial year by “maximising the benefits of improved data and technology systems” and renegotiating externally provided services.

The Future Fund Management Agency – a non-corporate government entity which oversees operations of the $335 billion fund – will also review 10 roles across investment and non-investment areas.

This will ensure that staffing “continues to reflect business needs and priorities”, the fund said in a statement on Tuesday.

“In all cases appropriate consultation with relevant staff is being undertaken before decisions about roles are made,” the statement said.

The technology-related savings will shave about five to seven per cent off costs in the next financial year, with further savings expected in subsequent years, the Future Fund said.

Chief executive Raphael Arndt said the fund was “baking in” the benefits and maximising the efficiencies of its technology overhaul.

It follows a string of job cut announcements tied to the use of AI by employers in the financial sector.

Earlier in April, Bendigo and Adelaide Bank announced it would trim down its workforce by hundreds of roles after inking two technology deals.

Dr Arndt said the Future Fund has invested significantly in its data, technology, people, processes and culture since the start of the COVID-19 pandemic, and has identified a “new investment order” reshaping the investment environment.

“Our investment in data and technology and in the systems and ability to use them has been critical to investment performance,” he said.

“Overall, the agency’s costs and staffing level are appropriate for the scale and complexity of our investment objectives, but we need to make sure that remains the case.

“We will continue to assess the resources needed to generate strong risk-adjusted returns in a complex investment environment, making changes where it is prudent to do so.”

Australian gas exporters might already have signed their last contracts with overseas buyers as fresh modelling suggests a glut of cheap supply and climate goals will temper demand.

Challenging industry forecasts of robust demand for Australian LNG as advanced Asian countries transition and developing nations industrialise, consultancy Climate Resource anticipates a decline in demand for the imported fuel.

Stable or falling demand for imports from Australia’s biggest customers is expected as less gas is used for electricity generation due to emissions-slashing pledges, cheap renewable energy and moves away from brittle fossil fuel supply chains.

The US and Qatar are also expected to flood the global market with supply in the late 2020s and early 2030s, despite delays caused by damage to the Ras Laffan LNG terminal during the Middle East war.

In addition, as countries decarbonise, those with domestic gas industries – such as China and India – are expected to prioritise their own supply over LNG imports that must be liquefied, shipped and regasified at great expense. 

“LNG is the most expensive option and the first to go,” Climate Resource decarbonisation lead Anita Talberg said. 

“LNG demand falls faster than gas demand.”

Future demand forecasting by industry typically focuses on total gas use.

By isolating uncontracted LNG demand, Climate Resource was able to predict whether Australia’s contracts would likely be renewed or new ones negotiated.

Based on the research, Australia’s network of gas contracts might be the last ever sold to buyers.

Existing contracts already exceed total global demand by 2027 in a 1.6C scenario and only modest increases in LNG are needed under a 2C pathway – supply that will likely be met by cheaper incoming US and Qatar product.

Disruptions to Middle East LNG supplies have sent prices soaring across the globe and brought fossil energy supply chains into sharp focus.

This has prompted calls from industry and its supporters to boost domestic production and exploration in response to the crisis.

Investor Group on Climate Change policy executive director Francesca Muskovic said the longer-term trend continued to point towards weakening demand for Australia’s LNG despite the short-term crisis.

“If anything, you’re going to see an acceleration in the trend towards electrification out of this crisis,” she told AAP.

“You’re not seeing any of our Asian trade partners suggest that the longer term, the future for their country, and as regards to meeting their climate commitments, involves increased use of LNG.”

The Australian government’s own modelling points to the decline of the LNG export industry, with the value of coal and gas exports predicted to fall 50 per cent by 2030 on Treasury numbers. 

The Duke and Duchess of Sussex have touched down on Australian soil as they prepare to front a whirlwind round of private events.

The first stop of their four-day visit – at Melbourne’s Royal Children’s Hospital – reflects the couple’s oft-cited concern and involvement in youth and frontline services.

The second – at a centre delivering homeless services for women – parallels Meghan’s longstanding commitment to community-led support for vulnerable women.

But other planned appearances are decidedly more commercial.

Organisers of a three-day women’s retreat say Meghan will headline the exclusive event – pitched as a “girls weekend like no other” – while Harry is set to deliver a keynote speech on workplace mental health at a Melbourne summit.

Tickets to the retreat start at $2699, while in-person attendance at the summit will set punters back about $1000 or more.

The privately funded trip is not an official royal tour, with the couple no longer working members of the royal family after renouncing their status and moving to North America in 2020.

But for Giselle Bastin, a Flinders University associate professor and expert on the British royal family, the decision to use their titles to pursue private interests will be perceived by many as a conflict of interest.

“It’s well known that the Sussexes are in dire need of income and so a staging of a quasi-royal tour to Australia is being regarded as a rather desperate attempt to monetise their status as royalty,” she told AAP.

“During the 2018 tour, Meghan was overheard to say that she couldn’t believe she ‘wasn’t being paid for this’, and the irony is that this time she is coming to Australia and being paid.”

During their headline-grabbing trip almost a decade earlier, adoring crowds clamoured to catch a glimpse of the newlyweds and much of the nation gushed as news of Meghan’s pregnancy was announced.

“By contrast in 2026, the Sussexes have ceased to be working royals and have used media platforms to air their grievances about the royal family,” Assoc Prof Bastin said.

“They are thought to have cast a shadow over the final years of the late Queen Elizabeth II and the Duke of Edinburgh, and for this they have attracted the ire of many a royal follower.”

Adding to the shift in public sentiment has been police confirmation taxpayers will cover additional security costs and public safety operations, contradicting repeated assurances from the couple’s team that the visit would be entirely privately funded.

An online petition calling for Australian taxpayers not to foot the bill has attracted more than 45,000 signatures.

“I imagine many Australians will feel offended by being used as a backdrop for a tour by a couple who are monetising their royal status for self-gain and not for the purpose of strengthening the ties between Australia and the monarchy,” Assoc Prof Bastin said.

And what is next for Brand Sussex?

“Increased debt, I imagine, and not much money for jam,” the royal expert said.

The appointment of the first woman to lead the Australian army has been hailed as a significant moment for the defence force, but experts say more work is needed to improve representation across the organisation.

Susan Coyle, current chief of joint capabilities, will be the first woman to be appointed head of any branch of the Australian Defence Force when she steps into the role of chief of army in July.

Lieutenant General Coyle enlisted as a soldier in the army reserves in 1987 and has since been deployed to East Timor, the Solomon Islands and Afghanistan.

In 2020, she was the first woman to command the joint task force for all Australian operations in the Middle East.

While there would be much focus on what the appointment means for women, defence expert Jennifer Parker said Lt Gen Coyle’s impressive service during her career must be acknowledged. 

“Men and women, particularly those within the ADF, should be very proud of this day … Lt Gen Coyle has significant operational and professional experience and has led a range of commands throughout her career,” Ms Parker told AAP.

“It has taken us too long to get here, and I think we shouldn’t take this as read that everything is solved in terms of representation across the ADF.

“We still need to focus on making sure we have opportunities for women and people with different backgrounds.”

Ms Parker, who served in the Royal Australian Navy for more than 20 years and is an expert associate at the ANU National Security College, said it was only in 2013 that restrictions on women serving in all defence roles were removed.

“We should reflect on how much things have changed, but also that there is still more to do,” she said.

“It’s incredibly important for women to see the opportunities available to them … this is a significant moment for the army, but I wonder how long it will still take for a woman to be appointed the head of the navy or air force.” 

Lt Gen Coyle’s appointment comes as the defence force grapples with allegations from female veterans about sexual abuse and harassment experienced during their service. 

About 2500 women have joined a landmark class action case against the Commonwealth, alleging a culture of systemic sexual abuse, harassment and discrimination within the ADF. 

Changing a culture within any organisation required more than one significant appointment, Ms Parker said.

“This is a complex thing. Culture is ever evolving … (this announcement) is a signal of things going in the right direction, but there are still changes to be made,” she said.

“I’m not sure one moment signifies that a culture has changed. It’s about constant small changes.” 

Announcing the appointment, Defence Minister Richard Marles revealed Lt Gen Coyle told him, “you cannot be what you cannot see”. 

“Susan’s achievement will be deeply significant to women who are serving in the Australian Defence Force today and women who are thinking about serving … in the future,” he told reporters on Monday.

Mr Marles is set to address the National Press Club in Canberra on Thursday, when he will launch the 2026 National Defence Strategy and Integrated Investment Program.

He is expected to announce the federal government will invest up to $15 billion in uncrewed and autonomous systems for the defence force, including drones, in the next decade. 

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Migrants that do not exhibit a belief in a “fair go” for all could be booted from Australia if the coalition governs again.

As One Nation leader Pauline Hanson breathes down his neck, Opposition Leader Angus Taylor will unveil the first piece of the coalition’s hardline migration plan in a speech to Liberal-aligned think tank the Menzies Research Centre on Tuesday.

Without putting a number on the migrant intake target he would pursue in government, Mr Taylor wants to place greater scrutiny on people attempting to come to Australia from countries that are not Western liberal democracies.

Three key measures will seek to “lower the numbers and lift the standards” of Australia’s migration program.

They include putting “Australian values” at the centre of migration laws, shutting the door to unauthorised migrants who try to game the asylum system, and giving a “red light to radicals” by strengthening screening processes.

While Australia does not discriminate based on nationality, race, gender, or faith, it must begin rejecting some prospective migrants based on values, Mr Taylor will say, according to an extract of the speech.

“Those who migrate from liberal democracies have a greater likelihood of subscribing to Australian values compared to those migrating from places ruled by fundamentalists, extremists, and dictators,” he will say.

“In that vein, the cohort of Gazans let into Australia following the October 7 attacks present a clear risk to our country. 

“They come to our country from a society run by the barbaric Islamist terrorist organisation of Hamas – an organisation that has sought to indoctrinate and radicalise their entire population to accept fanatical violence as normal, especially the genocidal slaughter of Jews. 

“That cohort must be re-assessed entirely with far greater scrutiny.”

Complying with the Australian values statement will be enshrined into law and a prescribed set of behaviours that constitute a breach of Australian values will be established.

“In short, if a visa holder undermines our democratic values, doesn’t respect the law, or demonstrates they don’t respect our core values, they will be booted out of Australia,” Mr Taylor will say.

The Australian values statement is a document prospective migrants must currently sign when applying for a visa, which outlines the values they are expected to uphold.

These include respect for the freedom and dignity of the individual, freedom of religion, commitment to the rule of law, recognising English as the national language, and a “fair go” for all that embraces mutual respect, tolerance, compassion and equality of opportunity.

What behaviours that would constitute a breach of these values and act as grounds for deportation would be fleshed out in government, a spokesperson for the opposition leader said.

Mr Taylor will also pledge to bring back temporary protection visas, after the government moved people seeking asylum onto a more permanent visa class.

This will aim to cut down “cheating” of the immigration system and disincentivise overstaying.

The coalition would also establish a joint agency taskforce to boot out overstayers who take advantage of the “appeals merry-go-round”.

Non-citizens will also no longer have access to taxpayer-funded legal aid to appeal cancellations.

Mr Taylor also pledged to establish an enhanced screening coordination centre to identify and block “terrorist sympathisers and security risks” before they enter Australia.

The enhanced screening process would include all applicants being forced to provide their social media accounts when applying for a visa.