Australian Bond Exchange Weekly Update
12th September 2025
Key Points
- Australia: The Reserve Bank of Australia (RBA) reduced the cash rate by 25bp to 3.60% p.a., its lowest level in more than two years. July inflation showed headline CPI rising 2.8% YoY (+0.3% MoM) and trimmed mean CPI increasing 2.7% YoY (+0.2% MoM).
- United States:The Federal Reserve kept the target range for the federal funds rate at 4.25%–4.50% at its 30 July 2025 meeting. August CPI was 2.9% YoY and 0.4% MoM (SA), up from 2.7% YoY in July. Producer prices (final demand PPI) fell 0.1% MoM in August.
- Eurozone: The European Central Bank (ECB) maintained its deposit rate at 2.0% p.a. June inflation edged up to 2.0% YoY (+0.1% MoM) from 1.9% in May, consistent with the Bank’s target.
- United Kingdom: The Bank of England (BoE) lowered the Bank Rate by 25bp to 4.00% p.a. July inflation rose to 3.8% YoY (+0.2% MoM), up from 3.6% in June.
Market Insights
- Unlock Exclusive Investment Opportunities with Fixed Returns in AUD
- Four Major Australian Banks Announce Job Cuts
- U.S. Job Growth Overstated by 911,000 Jobs; Fed Pressure Increases
Four Major Australian Banks Announce Job Cuts
Australia’s Big Four banks ANZ, NAB, Westpac, and Commonwealth Bank are set to cut nearly 8,000 jobs in 2025, up from 4,665 in 2024. ANZ will reduce 3,500 permanent roles and 1,000 contractor positions, incurring a restructuring cost of A$560 million.
NAB has eliminated over 400 roles and shifted 127 positions offshore. Westpac is reducing its headcount by around 1,500, while Commonwealth Bank has trimmed 164 positions.
The layoffs coincide with rising unemployment, which climbed from 3.5% in June 2023 to 4.3% in June 2025 (+0.2pp MoM), before easing slightly to 4.2% in July (–0.1pp MoM). Cost pressures, digital transformation, and subdued consumer demand are driving the sector’s restructuring, highlighting the challenges for the broader Australian labour market as monetary policy remains restrictive.
U.S. Job Growth Overstated by 911,000 Jobs; Fed Pressure Increases
The U.S. Bureau of Labor Statistics (BLS) issued a benchmark revision cutting job growth for the year ending March 2025 by 911,000 positions the largest downward adjustment on record. The revision significantly reduces average monthly payroll gains, signalling a weaker-than-expected labour market.
This has intensified pressure on the Federal Reserve to consider interest rate cuts, even as inflation remains above target. Markets are increasingly focused on whether the Fed will pivot toward easing in the second half of 2025, with labour market softness likely to weigh heavily on its policy decisions.
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*Data accurate as at 12.09.2025
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