Headline CPI rose more than expected, from 2.8% to 3% prompting analysts to push back forecasts for further rate cuts until November or early 2026. Core inflation fell slightly to 2.6%, edging closer to the RBA’s target band, but price pressures persist in housing and services.
GDP grew 0.6% in the June quarter, driven by a rebound in consumer spending and solid wage growth. The unemployment rate held steady at 4.2%.
Despite cautious consumer sentiment – the Westpac-Melbourne Institute Consumer Sentiment Index fell 3.1% in September – business confidence remains upbeat, particularly in retail and manufacturing.
Despite the August/September period noted for being seasonally weak, markets remain at near record levels. The ASX 200 was supported by strong performance in banking and mining stocks. US equities, meanwhile, continue to push higher off the back of the AI boom and anticipation of rate cuts.
Commodity prices and risk appetite helped the Australian dollar touch an 11- month high before easing slightly.
