Weekly Market Preview
Friday, 26 September 2025
All eyes will be on the Reserve Bank of Australia’s interest rate decision this week. Expectations suggest the central bank will keep rates unchanged at 3.60%, following three cuts earlier this year. Inflation in Australia held steady at 2.1% in the second quarter, while GDP growth was flat at 0.6% and unemployment remained at 4.2% all pointing to the need for further economic stimulus. With inflation near its 2% target, the RBA is expected to deliver another 25-basis point cut at its November meeting. Investors will also focus on the RBA’s press conference, where policymakers are likely to emphasize data dependency and their commitment to maintaining price stability.
Traders are also awaiting preliminary European Consumer Price Index data this week. Forecasts suggest headline inflation could rise from 2.0% to 2.2% year-on-year, while core inflation is expected to hold steady at 2.3%. The European Central Bank cut rates eight times between June 2024 and June 2025 before pausing as inflation stabilized around its 2% target. However, the possibility of another 25-basis point cut this year remains, provided inflation does not deviate significantly from that target.
Toward the end of the week, attention will turn to the September US jobs report, which will provide key insights into labour market conditions, including job creation, unemployment, and wage growth. Labor market and inflation indicators remain critical inputs for Federal Reserve policy decisions. The US economy added just 22,000 jobs in August, well below expectations of 75,000, highlighting clear labour market weakness. As a result, the Fed cut interest rates by 25 basis points at its September meeting and, in its dot plot, signalled the possibility of a 50-basis point cut this year and an additional 25 basis point cut next year. Fed officials described these measures as necessary to support labour market stability. For September, the economy is expected to add 70,000 jobs, with unemployment steady at 4.3%. Weaker-than-expected job data would continue to pressure the Fed toward further easing.
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