Businesses and consumers caught between opposing forces

Household confidence spiked following the Reserve Bank's first interest rate reduction in February but the prospect of a global economic slowdown brought about by the US president's trade war wiped away those gains.

Westpac and the Melbourne Institute will release the June update to their consumer sentiment index on Tuesday.

Despite a de-escalation in trade tensions between the US and China, uncertainty remains high.

In the central bank board's May minutes, the word uncertainty was used 21 times - almost double the figure in April.

But another rate cut by the RBA last month could at least provide a much-needed boost to consumer spirits, after spending was slower than expected in the first few months of the year.

Following the May board meeting, Reserve Bank governor Michele Bullock said there was a downside risk to the economy if households remained more cautious than they had been during past rate easing cycles.

Subdued consumption was having a flow-on effect for businesses, which are battling with relatively low spending while unit labour costs remain high.

Household spending rose just 0.1 per cent in April, cancelling out a 0.1 per cent fall the previous month, the Australian Bureau of Statistics reported on Thursday.

NAB's business survey, also to be released on Tuesday, will be closely watched for signs of how the last month of tariff turbulence and interest rate reductions have impacted firms' investment plans.

"Capex and forward orders indicators will be key to deducing how business decisions and demand have been impacted by global growth uncertainty," ANZ Bank senior economist Adelaide Timbrell said in a research note.

Capital expenditure fell 0.1 per cent in the March quarter, with spending on equipment and machinery dipping a worrying 1.3 per cent.

Australia desperately needs businesses to invest more in the sort of capital that can help boost anaemic productivity growth.

In NAB's last business survey, capex fell sharply by six index points while forward orders were also weak.

With little in the way of hard economic data on offer domestically, investors will cast their eyes offshore to US inflation data on Wednesday and Thursday.

"Tariffs have yet to meaningfully impact published CPI data to date," said ANZ economists Tom Kenny and Shwetha Sunilkumar.

"We think May's CPI data will show some of the increased cost pressures facing businesses being passed onto consumers, particularly via higher goods prices."

The US central bank has remained cautious, keeping rates on hold at 4.25 per cent since December and has so far resisted Mr Trump's demands to drop them.

If inflation remains subdued, the Fed could eventually be reassured enough to resume its easing cycle.

Wall Street closed higher on Friday after a better-than-expected jobs report calmed worries about the economy, while Tesla bounced, clawing back some previous session losses.

The S&P 500 closed above 6000 for the first time since February 21, fuelled by gains in technology shares.

Australian share futures moved up 29 points, or 0.34 per cent, to 6226.

The S&P/ASX200 traded a tight range on Friday to finish 23.2 points lower, down 0.27 per cent to 8,515.7, as the broader All Ordinaries slipped 26.7 points, or 0.3 per cent, to 8,741.9.