Yesterday's Recap
Equity and currency markets in Australia and New Zealand reacted to shifting rate expectations rather than fresh data releases. The ASX 200 rose 0.17 percent to 8,809.90 while the NZX 50 slipped 0.09 percent to 13,733.93. The Australian 2-year government yield climbed 6 basis points to 4.92 percent and the 10-year yield added 3 basis points to 5.28 percent.
AUD/USD remained at 0.70 while NZD/USD fell 0.03 percent to 0.57. BHP shares dropped 3.64 percent amid a broad commodity sell-off that also sent Brent crude 5.26 percent lower. News flow highlighted RBA concerns over government spending and energy prices complicating the inflation outlook.
Australian inflation remains sticky above the RBA’s target band, supported by energy price shocks and persistent services costs. Government spending has added to demand pressures, complicating the central bank’s task of returning inflation sustainably to 2-3 percent. New Zealand’s economy shows similar price momentum, with dairy export revenues and construction activity providing underlying support.
Both countries remain sensitive to China’s growth trajectory, which continues to influence commodity demand and tourism flows. Housing markets in Australia and New Zealand show resilience despite higher borrowing costs, limiting the transmission of tighter policy.
The Day Ahead
Attention turns to the RBA Senate appearance and Australian inflation figures due tomorrow evening. Markets expect the CPI year-over-year rate to rise to 4.2 percent from 4.0 percent, with the trimmed-mean measure also firming. The RBNZ is scheduled to announce its policy decision at 21:00 ET on 2026-10-28, with consensus pointing to a 25 basis point increase to 3.0 percent.
Later in the week New Zealand business confidence and Australian PPI data will provide further context on price pressures. These releases will shape expectations for the RBA’s November meeting and the RBNZ’s subsequent path. The Federal Reserve is expected to hold rates steady, widening the policy gap with both the RBA and RBNZ.
Higher oil prices have raised global inflation concerns and delayed relief for Australian consumers. Commodity exporters in Australia face mixed signals as iron ore and LNG prices remain elevated while base metals weaken. The New Zealand dollar has reacted to the prospect of earlier RBNZ tightening relative to the Fed.
Mortgage Lending Rate (New Borrowers, 1Y Fixed) | Type: macro_line | Mortgage Lending Rate (New Borrowers, 1Y Fixed): 1.73 (2026-10-22) | Range: 1.31–2.81 | Trend(6pt): 2.62,1.81,1.72,1.57,1.63,1.73
