Australian Bond Exchange Weekly Update
7th November 2025
Key Points
- Australia: Australia: The Reserve Bank of Australia (RBA) left the cash rate unchanged at 3.60% p.a. at its November 2025 meeting. The September-quarter CPI rose 3.2% year-on-year, while the trimmed mean inflation a key underlying gauge used by the RBA, increased to 3.0% in the year to the September 2025 quarter, up from 2.7% in the June quarter.
- United States: The Federal Reserve cut its target cash rate by 0.25% to 3.75% p.a. to 4.00%p.a. September headline inflation was 3.0% (YoY), up from 2.9% in August.
- United Kingdom: The Bank of England (BoE) held interest rate steady at 4.00% p.a. at its November meeting. The September inflation stood at 3.8%(YOY).
- Eurozone: The European Central Bank (ECB) has maintained its deposit rate at 2.0%p.a. Inflation in September increased slightly to 2.2%(YoY) – up from 2.0% in August.
Here are the latest monetary-policy and inflation figures for key economies:
| Region | Policy Rate | Latest Inflation (YoY) |
|---|---|---|
| Australia | Cash rate 3.60% p.a. (Reserve Bank of Australia, November 2025) | 3.2% to September 2025 (quarterly CPI indicator) |
| United States | Policy range 3.75–4.00% (Federal Reserve cut 25 bps on 29 October 2025) | 3.0% to September 2025 (CPI) |
| United Kingdom | Bank rate 4.00% (Bank of England) | 3.8% to August 2025 |
| Eurozone | Deposit facility rate 2.00% (European Central Bank held 11 September 2025) | Headline inflation ≈ 2.1% (ECB projected average for 2025) |
Market Insights
- Current Investment Opportunities
- RBA left cash rates unchanged as expected
- Australian Consumer Demand Remains Resilient
- U.S. Government Shutdown – Economic and Market Implications
RBA Left Cash Rates Unchanged As Expected
The Reserve Bank of Australia’s (RBA) Monetary Policy Board kept the cash rate steady at 3.6% p.a., as widely expected. The Board noted that the September-quarter inflation surge has temporarily lifted the near-term inflation outlook.
The RBA acknowledged a modest easing in labour-market conditions but continues to view the market as “slightly tight.” The unemployment forecast was revised marginally higher but remains broadly stable over the projection period.
Overall, while inflation is expected to moderate as the recent spike passes, the RBA remains cautious and is likely to hold rates steady until inflation falls below the midpoint of its target band or labour-market conditions soften meaningfully.
Australian Consumer Demand Remains Resilient
Recent trading updates from major Australian retailers suggest that consumer demand remains firm despite ongoing cost pressures and selective weakness across certain segments.
At its AGM, Wesfarmers reported strong demand across its key retail businesses — Bunnings, Kmart, and Officeworks — which together contribute roughly 80–90% of group EBIT. In the supermarket sector, both Woolworths and Coles posted solid comparable-sales growth in the September quarter (+1.6% and +4.6% respectively) versus the prior corresponding period.
Price inflation remained contained, with Coles’ inflation edging up slightly to 1.6% and Woolworths’ holding flat at 0.1%, indicating limited pricing pressure across the sector.
Overall, these results highlight steady top-line growth among Australia’s major retailers, with stable inflation and manageable margin pressure. Household spending appears resilient even as cost pressures persist across supply chains.
Why this matters for interest rates:
Retail sector performance provides timely evidence of household spending strength, inflation trends, and monetary-policy transmission. The resilience in consumer activity — though under some pressure — suggests underlying demand remains stronger than expected. This could make the RBA more cautious about easing too early, as persistent spending risks keeping inflation above the Bank’s comfort zone for longer.
Source: Common Wealth Bank
U.S. Government Shutdown – Economic and Market Implications
The U.S. federal government shutdown, now lasting over a month, has become the longest in U.S. history following a deadlock in Congress over funding. Approximately 800,000 federal employees are either furloughed or working without pay, while agencies such as the Federal Aviation Administration (FAA) have begun reducing services, including a planned 10% cut in flight operations at major airports.
Economically, the shutdown is expected to dampen near-term GDP growth and weaken consumer confidence, particularly if key social-support programs remain disrupted. Prolonged political gridlock has increased investor caution, pushing U.S. Treasury yields lower as markets price in slower growth and rising fiscal risk.
Current Investment Opportunities
Contact your ABE adviser now to take advantage of this opportunity today
|
| Yield To Maturity(% p.a.) | Coupon(% p.a.) | Investment | Maturity |
|---|---|---|---|
| 6.01% | BBSW + 2.02% | NAB Credit Linked Security | 18 Nov 2031 |
| 5.57% | 6.00% | Dell Inc Credit Linked Security | 21 Dec 2026 |
| 6.00% | 6.00% | Marks & Spencer Bond Linked Security | 21 May 2026 |
| 6.25% | 6.25% | Ford Motor Co Credit Linked Security | 20 Dec 2026 |
| 7.5% – 8.2% | 9.25% | Magnetic Rail Group Pty Ltd Credit Linked Security (Wholesale Only) | 24 May 2030 |
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*Data accurate as at 07.11.2025
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