How are RBA rate cuts fueling Australia 200's record high?

The Australia 200 trades 29 points (0.33%) higher at 8873 as of 3.15pm  AEST.

The Australia 200 (ASX 200) has surged to a fresh record high of 8880.20 this afternoon after the Reserve Bank of Australia (RBA) cut interest rates by 25 basis points (bp) to 3.60% and hinted at more rate cuts to come. 

RBA signals continued easing as inflation moderates

The RBA noted progress on inflation, with its updated staff forecasts suggesting that underlying inflation will continue to moderate to around the midpoint of the 2% to 3% range.

The RBA also acknowledged downside risks to growth, stating, 'There is a risk that consumption growth is a little slower than expected, which could weigh on overall demand and lead to weaker labour market conditions.' As a result, the RBA revised its gross domestic product (GDP) projection for December 2025 lower to 1.7% from 2.1%.

The RBA’s forecast for the unemployment rate was left unchanged at 4.3% by year’s end, although this seems slightly optimistic given that the unemployment rate is already at that level and the economy is slowing. This assumption will come under scrutiny on Thursday when the July labour force report is released.

The decision to cut rates was unanimous, and assuming inflation continues to moderate, it is expected that the cash rate will 'follow a gradual easing path,' reinforcing the RBA’s cautious easing bias.

Key economic releases to determine future rate cuts

Ahead of the next RBA Board meeting in seven weeks on 30 September, several key data releases will help determine whether the RBA will cut by another 25 bp to 3.35% in September or wait until November, which is the more likely scenario.

These releases include:

• Second quarter (Q2) GDP on Wednesday, 3 September
• Westpac consumer confidence on Wednesday, 10 September
• National Australia Bank (NAB) business confidence on Wednesday, 10 September
• Labour force report for August  on Thursday, 18 September
• Monthly consumer price index (CPI) indicator on Wednesday, 24 September

Following the RBA decision, the Australian interest rate market is almost fully priced for additional 25 bp rate cuts in November and March 2026, which would bring the cash rate back to around 3.10%, considered near 'neutral,' where rates are neither restrictive nor expansionary.

Australia 200 stocks

Consumer-facing sector

The interest rate sensitive financial and consumer facing sectors performed well as would be expected given their sensitivity to RBA interest rate expectations. 

• JB Hi-Fi surged 5.57% to $113.84
• Cettire lifted 4.17% to $0.31
• Nick Scali added 2.24% to $20.98
• Myer gained 1.61% to $0.63

Financial sector

• ANZ added 2.34% to $31.98
• Westpac lifted 0.82% to $34.59
• NAB gained 0.41% to $38.97
• Commonwealth Bank of Australia climbed 0.28% to $179.08

Lithium sector

The lithium sector saw heavy falls after yesterday’s strong rally.

•  Liontown dived 10.5% to $0.89
• Pilbara lost 4.33% to $2.21
• IGO slipped 2% to $5.32.

Australia 200 technical analysis

Following the Australia 200’s push to fresh record highs and given the index’s sensitivity to RBA rate cut expectations, we expect to see continued gains towards the next upside target at 9000 in the weeks ahead. This view is based upon the Australia 200 remaining above support at 8630 - 8610ish.

Australia 200 daily chart

• _{Source: TradingView. The figures stated are as of 12 August 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}