contents 1 introduction 5 international economic developments 13 box a recovery in japan 15 and foreign exchange markets 23 domestic conditions 31 b regional performance 35 trade capital flows 40 c commodity contract prices 43 financial 52 d gains measures of household saving 55 infl ation trends prospects statement on monetary policy may 2006 the material this was fi nalised 3 next is due for release 4 august published quarterly february november each year all statements are available website when released reproduced following issue bulletin expected dates advised ahead time bank s copyright disclaimer notices relating to data see issn 1448 5133 print 5141 online australian economy continuing benefi t from favourable global expansion proceeding at