The RBA left interest rates unchanged in June saying its six rate hikes since October 2009 represent a significant adjustment to monetary policy, but it left open the prospect of a return from the sidelines within a short period of time saying policy is appropriate only for the "near-term."
The Australian sharemarket had a poor month in May, with the All Ordinaries Index falling 7.9% to close at 4,453.6 points. International markets were also down as fears of a Europe led debt crisis affected global financial markets.
The Dow Jones Index closed down 7.9%, the FTSE closed down 6.6%, the Hang Seng closed down 5.0% and the Nikkei 225 closed down 9.9% for the month.
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The current account deficit narrowed to a seasonally adjusted $16.55bn in the first quarter of 2010 from the fourth quarter of 2009, the ABS said. But the deficit on goods and services, in seasonally adjusted chain volume terms, widened by $1.5bn over the quarter, and is expected to subtract 0.5% from GDP growth.
US markets were closed overnight for the Memorial Day holiday, while markets in the UK were closed for the Spring Bank holiday. European stocks finished a quiet with a slight rise, as German stocks outperformed their Continental rivals in the first reaction to a downgrade of Spain by Fitch Ratings.
The Stoxx Europe 600 finished the day with a rise of 0.3% to 244.79, led by carmakers and technology-sector firms. Shares of Daimler AG rose 1.5% and shares of business software giant SAP rose 1.7% as the German DAX finished with a rise of 0.3% to 5,964.33.
US stocks fell on Friday, ending their worst month in more than a year as measures of consumer spending and Chicago-area business activity disappointed. Walt Disney, Bank of America and Cisco Systems were among the decliners.
US stocks surged on Thursday, posting their second largest gain this year as fears of eurozone contagion receded and investors flocked back to riskier stocks, lifting shares of technology companies including Intel and Microsoft. American Express also jumped, boosted by an analyst upgrade.
Private new capital spending on buildings and equipment fell 0.2% to $27.7bn in the first quarter of 2010 from $27.75bn in the fourth quarter 2009, the Australian Bureau of Statistics said.
Spending rose 1% from the first quarter of 2009. A sixth estimate of expenditure shows companies expect to invest $108.7bn in the fiscal year ending June 30, 2010, a fall of 2.5% from the sixth estimate for 2008-09.
The second estimate for 2010-11 is $103.9bn, up 16.9% from the corresponding estimate for 2009-10.
The economy is set to continue to stand out on a global basis as economic growth increases to 3.25% in 2010 before accelerating to 3.5% in 2011, according to the Organisation for Economic Cooperation and Development.
The new outlook supports a further gradual tightening in interest rates. Managing the exit strategy from the crisis is less problematic in Australia than most countries, with recent tightening of monetary and fiscal policy a welcome development.
US stocks fell as worries about the global economy flared anew late in the session, overcoming an earlier rally that had been powered by encouraging US economic data. Microsoft, McDonald's and American Express were among the decliners.