ASX 200 reaches record high on RBA rate cut hopes

The Australia 200 trades 81 points (0.91%) higher at 9072 at 1.30pm AEDT.

The Australia 200 (ASX 200) has surged to a fresh record high today of 9109.7 following the release of a soft labour force report for September, which has reignited expectations of a Reserve Bank of Australia (RBA) rate cut at its next Board meeting.

Labour market insights

The report showed employment in Australia rose by 14,900 jobs in September, falling short of the 20,000 gain the market expected. The unemployment rate increased to 4.5% from a revised higher 4.3%, reaching its highest rate since November 2021.

Today’s soft jobs report confirms that the Australian labour market is quickly cooling - a trend that first became notable a few months ago but became more obvious after last month’s jobs report.

However, last month’s warmer-than-expected monthly consumer price index (CPI) prompted many commentators to conclude that the end of the RBA’s easing cycle was near, and subsequent hawkish RBA commentary raised the bar for additional cuts even further.

Rate cut speculation

The RBA now finds itself in a very awkward position. However, as we saw in the United States (US) recently, when the labour market starts to crack, persistent inflation quickly becomes yesterday’s problem as central banks move rapidly to cut rates to lend support to the labour market.

We continue to expect that the RBA will cut the cash rate by 25 basis points (bp) in November 2025, bringing it to 3.35% and we expect an additional 25 bp rate cut in February 2026, lowering the cash rate to 3.10%.

ASX 200 stocks

Financial sector

In anticipation of RBA rate cuts, the interest-rate-sensitive real estate and financial sectors surged higher.

• Australia and New Zealand Banking Group popped 2.44% to $36.98, a fresh record high
• Commonwealth Bank of Australia added 1.91% to $169.98
• Westpac gained 1.69% to $39.81 - also a record high
• National Australia Bank climbed 1.24% to $44.11.

Health care sector

Health care stocks continued their revival.

• Primary Health Care (3.18% to $0.81)
• Sonic Healthcare (3.11% to $21.87)
• Cochlear (1.28% to $285.16)
• CSL (1.27% to $219.29).

Real estate

• Stockland Group surged 3.70% to $6.45
• Goodman Group rose 3.68% to $34.10
• Mirvac Group added 3.23% to $2.39.

Technology sector

• DroneShield fell 4.51% to $4.88, on track for a fifth straight decline. After surging over 120% from its September lows to a recent high of $6.71, we view this pullback as a healthy correction rather than a trend reversal and expect dip buyers around $4.50 – $4.30.

ASX 200 technical analysis

After seven weeks of consolidation during September and the first half of October, the ASX 200 has exploded to life this week.

Presuming today’s break above resistance at 9050 – 9025 is sustained over the next 24 to 48 hours, we think it likely sets up a solid run higher into the year-end. In this instance, the next upside target is 9250, and after that, attention will turn to 9500.

Be aware that if the ASX 200 were to slip back below support at 9050 – 9025 and then below 9000, it would indicate that today’s break higher has failed.

ASX 200 daily chart

• _{Source: TradingView. The figures stated are as of 16 October 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.}