Global markets boosted by Wall Street records

ASX 200 gains as S&P 500 and Nasdaq hit highs

The S&P 500 and the Nasdaq 100 have started the new quarter with fresh record highs, despite a soft Automatic Data Processing (ADP) employment report and the first United States (US) government shutdown since 2018.

Locally, the Australia 200 (ASX 200) is up 1.82% at the time of writing, poised for its largest weekly gain in 11 weeks. The rise has been bolstered by strong performances from healthcare stocks and the big banks, despite the Reserve Bank of Australia (RBA) holding rates steady at 3.60% and striking a hawkish tone.

The week that was: highlights

• In the US, Job Openings and Labor Turnover Survey (JOLTS) job openings increased by 19,000 to 7.227 million in August 2025 from a revised 7.208 million in July, aligning with expectations
• The Conference Board consumer confidence survey fell 3.6 points to 94.2 in September, below the expected 96
• The Institute for Supply Management (ISM) manufacturing purchasing managers’ index (PMI) for September rose to 49.1 from 48.7 previously
• The ADP employment report showed a 32,000 decline in private payrolls for September, with August's figure revised lower from +54,000 to -3000
• In the European Union (EU), euro area (EA) inflation rose to 2.2% year-on-year (YoY) from 2%, as expected. The core reading remained stable at 2.3% YoY, its lowest level since January 2022
• In Japan (JP), the Bank of Japan’s (BoJ) Tankan index edged up to 14 in the third quarter (Q3) from 13 in the second quarter (Q2)
• In China (CN), the National Bureau of Statistics (NBS) manufacturing PMI rose to 49.8 in September from 49.4
• In Australia (AU), the RBA kept rates on hold at 3.60% as expected
• Crude oil dropped 7.62% this week to $60.71
• Gold gained 2.69% this week to $3861
• Bitcoin surged 7.38% this week to $120,489
• Wall Street's gauge of fear, the volatility index (VIX), increased to 16.62 from 15.29 the previous week

Key dates for the week ahead

Australia & New Zealand

• AU Westpac consumer confidence: Tuesday, 7 October at 9.30am AEST
• AU National Australia Bank (NAB) business confidence: Wednesday, 8 October at 10.30am AEST
• New Zealand (NZ)  Reserve Bank of New Zealand (RBNZ) interest rate decision: Wednesday, 8 October at 12.00pm AEST
• NZ – Business New Zealand (NZ) PMI: Friday, 10 October at 7.30am AEST

China & Japan

• CN balance of trade: Monday, 13 October at 1.00pm AEST

United States

• US Federal Open Market Committee (FOMC) meeting minutes: Thursday, 9 October at 5.00am AEST
• US Federal Reserve (Fed) Chair Powell speech: Thursday, 9 October at 10.30pm AEST
• US Michigan consumer sentiment: Saturday, 11 October at 12.00am AEST

Europe & United Kingdom

• Euro area retail sale: Monday, 6 October at 7.00pm AEST
• United Kingdom (UK) Royal Institution of Chartered Surveyors (RICS) house price: Thursday, 9 October at 9.01am AEST

Key events for the week ahead

AU: Westpac consumer confidence

Date: Tuesday, 7 October at 9.30am AEST

Last month, the Westpac consumer confidence index fell 3.1% to 95.4 points, down from 98.5, its highest reading since February 2022. The decline reflects increased concern among Australian households about the economic outlook due to ongoing cost-of-living pressures, a softening labour market, and reduced optimism for further interest rate cuts from the RBA, despite a modest improvement in personal financial conditions.

Given the survey period for October's reading coincides with the recent RBA board meeting where rates were held steady and a hawkish tone was maintained, as well as concerns over a cooling labour market and a rebound in inflation in the latest monthly consumer price index (CPI), the index is expected to dip to 93.2.

AU Westpac consumer confidence chart

NZ: RBNZ interest rate decision

Date: Wednesday, 8 October at 12.00pm AEST

At its last meeting in August, the Reserve Bank of New Zealand (RBNZ) reduced its official cash rate (OCR) by 25 basis points (bp) to 3.00%, as expected. This marked the seventh rate cut in 12 months, totalling 250 bp from 5.50% to 3.00%. The decision was passed on a 4-2 vote, with two committee members advocating for a more aggressive 50 bp cut, indicating internal divisions on the pace of monetary easing.

The RBNZ’s forward guidance remains dovish, noting that if medium-term inflation pressures ease in line with the committee’s central projection, which targets 2% inflation by mid-2027, further OCR reductions are expected.

Since the last meeting, data indicates persistent economic weakness and subdued inflation. Q2 gross domestic product (GDP) contracted by 0.9%, highlighting risks to growth and the need for more stimulatory policy. Ahead of next week’s meeting, the NZ interest rate market is fully priced for a 25 bp cut, with a 40% chance of a 50 bp cut. Cumulatively, 60 bp of rate cuts are priced in by year-end, with the RBNZ’s terminal rate at approximately 2.25%.

RBNZ official cash rate chart

US: FOMC meeting minutes

Date: Thursday, 9 October at 5.00am AEST

At its last meeting in September, the Fed lowered the Fed Funds rate by 25 bp to a range of 4.00% - 4.25%, in line with expectations. It was the Fed’s first rate cut in nine months. Newly appointed board member Stephen Miran dissented, advocating for a 50 bp cut, contrary to expectations that Governors Waller and Bowman might support a larger reduction.

Fed Chair Jerome Powell’s prepared remarks were more dovish than previous statements, highlighting risks to employment and signalling further cuts. However, he struck a hawkish tone during the question and answer (Q&A), describing the rate cut as ‘risk management’ and noting rising growth projections in the Summary of Economic Projections (SEP).

Powell also remarked, ‘Let’s remember, though, the unemployment rate is 4.3 percent. The economy is growing at one and a half percent. So, it’s not a bad economy or anything like that. We’ve seen much more challenging economic times, but from a policy standpoint, what we’re trying to accomplish is challenging. There are, as I mentioned earlier, no risk-free paths now. It’s not incredibly obvious what to do, so we have to keep our eye on inflation.’

The FOMC minutes are expected to reflect a cautious tone, with most members supporting the 25 bp cut as a balanced approach to managing inflation and growth risks. The minutes are likely to emphasise the committee’s data-dependent stance, discussing the pace of future rate cuts and the evolving economic outlook. Investors will focus on any dissent, particularly Miran’s push for a larger cut, and the committee’s inclination toward aggressive easing or a gradual approach amid inflation concerns.

The US interest rate market is fully priced for a 25 bp Fed cut in October with an ~88% chance of another 25 bp cut in December. Looking ahead, there is a cumulative 115 bp of rate cuts priced through the end of 2026.

Fed funds rate chart