Australian Bond Exchange Weekly Update
20 Aug 2026
Market Insights
- Initial tranche of the new 8.0% p.a. Credit-Linked Note – closing soon
- US Hyperscaler Discovers the A$ Kangaroo Market
- Australia’s June-quarter wages data delivered few surprises
- US consumer showing some signs of cooling
Key Points
- Australia: The RBA left the cash rate unchanged at 4.35% p.a. at its August meeting. June CPI eased to 3.8% p.a., while Trimmed Mean was unchanged at 3.60% p.a.
- United States: The Federal Reserve left the federal funds rate unchanged at 3.50%–3.75% p.a. at its July 2026 meeting. The latest U.S. CPI inflation rate is at 3.5% p.a. in June 2026. Core CPI moderated further to 2.6% p.a.
- United Kingdom: The Bank of England held the Bank Rate steady at 3.75% p.a., and headline CPI for June was 2.6% p.a., down from 2.8% in May. Core inflation was unchanged at 2.6% p.a.
- Eurozone: The European Central Bank left its key deposit facility rate unchanged at 2.25% p.a., and Euro area CPI stands at 2.9% p.a. in July.
| Region | Policy Rate | Latest Inflation (YoY) |
|---|---|---|
| Australia | RBA Cash Rate 4.35% p.a. | 3.8% p.a. to June 2026 |
| United States | Fed Funds 3.50–3.75% p.a. | 3.5% p.a. to June 2026 |
| United Kingdom | Bank Rate 3.75% p.a. | 2.6% p.a. to June 2026 |
| Eurozone | Deposit Facility Rate 2.25% p.a. | 2.9% p.a. in July 2026 |
Australia’s June-quarter wages data delivered few surprises
Australia’s June-quarter wages data delivered few surprises, with the Wage Price Index rising 0.8% over the quarter and 3.2% over the year. The quarterly pace has now held at 0.8% for five consecutive quarters, but the composition continues to indicate a gradual easing of underlying wage pressures.
The clearest signal is coming from the private sector, where wage growth slowed to 0.7% over the quarter and 3.1% over the year, down from 3.4% a year earlier. That is the softest annual pace since 2022 and suggests the weakening in labour-market momentum is beginning to feed through to pay outcomes. Public-sector wages provided an offset, rising 0.9% over the quarter and 3.4% over the year, with the ABS pointing to increases in state government public-service jobs and scheduled rises under existing Commonwealth agreements.
The lack of a surprise saw little reaction across markets, with the result unlikely to materially alter the RBA’s policy outlook. The more important test comes in the September quarter, when the data will begin to capture the Fair Work Commission’s 2026 Annual Wage Review.
US consumer showing some signs of cooling
US retail sales fell 0.6% in July, the largest monthly decline in more than a year and weaker than expected, although sales remained 5% higher than a year ago. The weakness was concentrated in non-store retailers, where sales fell 2.2%, and motor vehicle and parts dealers, which were down 1.8%. Some of the decline, however, reflects temporary factors, including the timing of Amazon Prime Day and lower gasoline prices. Restaurant and bar sales continued to increase, rising 0.5%.
The July retail sales data suggest some moderation in US consumer momentum, but not a material deterioration in the broader growth picture. With the US economy and corporate earnings still showing a strong picture, the data are better viewed as evidence of some normalisation in demand rather than the start of a broader slowdown.
The data therefore point to some moderation in consumer momentum rather than a sharp deterioration. For the Fed, that distinction matters: softer demand should help contain inflation pressures, but the underlying consumer remains sufficiently resilient to argue against a rapid deterioration in growth.
Retail Sales Heatmap
Monthly movement across retail categories · Jul 2025 to Jul 2026
Green indicates positive movement, red indicates negative movement, and near-zero values remain neutral.
US Hyperscaler Discovers the A$ Kangaroo Market
Alphabet Inc., the US technology giant, has made a significant entry into the A$ Kangaroo bond market with a massive $5.5 billion new bond issue, which attracted a total order book approximately four times oversubscribed.
The transaction comprised multiple tranches of fixed and floating rate bonds, spanning maturities from 3 to 20 years. Despite the size of the deal, pricing was achieved at relatively slim margins over the risk-free Australian government benchmarks, with the new 5-year bond trading around 5.6% and the new 20-year bond around 7%.
The transaction highlights the growing importance and depth of the Australian fixed income market, which has become a significant global market for both international issuers and investors.
Wholesale investors: These types of transactions are available to wholesale clients only, with a minimum investment of $500,000 per parcel.
About INEOS Group
Founded in 1998, INEOS is one of the world’s largest privately owned chemical companies. Headquartered in London, the company operates approximately 154 manufacturing sites across 27 countries and employs around 26,000 people worldwide. Its growth has been driven by the strategic acquisition of chemical, refining and energy assets from major multinational companies. INEOS operates through a decentralised business model, with independent operating businesses focused on specific markets and products. Today, its operations span a broad range of sectors, including:- Petrochemicals
- Polymers
- Specialty chemicals
- Refining and energy (oil and gas)
- Automotive (INEOS Automotive, manufacturer of the Grenadier 4X4)
- Sports (including Formula One, professional cycling and football)
Investment Overview
| Issuer | C2 Specialist Investment Pty Ltd (ACN 622 433 043) |
| Product | INEOS Quattro Finance 2 PLC – Credit Linked Security |
| Type | Fixed Income Investment |
| Target Coupon | 8.0% p.a., paid semi-annually |
| Term | 20/06/2031 |
| Currency | AUD |
| Min. Investment | $10,000 |
| Eligibility | Retail and Wholesale Investors |
Example: How Fixed Income Works
A company issues a debt security with the following terms:Important Risks
Capital invested in the Units is at risk. There is no capital protection or guarantee of financial return. The Units reference the credit of the Reference Entity and include a risk of capital loss in part or in whole as a result of Credit Event(s).
View all key risks
- Capital invested in the Units is at risk: There is no capital protection or guarantee of financial return in respect of your investment in the Units.
- Credit exposure to Reference Entity: The Units will reference the credit of the Reference Entity, therefore the Units include a risk of capital loss in part or in whole, as the result of Credit Event(s) occurring with respect to the Reference Entity.
- Credit Rating: Investors should be aware that credit ratings do not constitute a guarantee of the quality of the Units or the Reference Entity.
- Secondary Offer Period: Investors who purchase Units in the Secondary Offer Period at an Issue Price greater than the Initial Issue Price of $100.00 will receive a lower overall return, as the Final Value and Coupons are calculated with respect to the Initial Issue Price of $100.00 per Unit.
- Performance of the Reference Entity: Historical performance of the Reference Entity should not be taken as an indication of the future performance of the Reference Entity during the Investment Term.
- Value of the Units before the Maturity Date: The Final Value of the Units is calculated by reference to the Reference Entity and its overall creditworthiness between the First Credit Event Occurrence Date to the Scheduled Last Credit Event Occurrence Date. The market value of the Units before the Maturity Date will be determined by many factors and may be less than what you paid for the Units.
- Liquidity risk: You may not be able to realise your investment when you want to. The Issuer Buy-Back facility is at the discretion of the Issuer. Issuer Buy-Back requests are determined in the Issuer’s discretion.
- Early Maturity: The Units may mature early following an Early Maturity Event, including as a result of an Adjustment Event or Market Disruption Event or if a Credit Event or a Compulsory Early Redemption occurs or if your request for an Issuer Buy-Back is accepted.
- Indirect Investment Risk: Compared to a direct investment (including bonds) in the Reference Entity, the investor will not be entitled to receive dividend or other payments (if any) nor have any voting rights for corporate actions to do with the Reference Entity, including if a Credit Event occurs.
- Counterparty Risk: Investors are subject to counterparty credit risk with respect to the Issuer and the Hedge Counterparty.
An investment in the Units is not equivalent to an investment in the bonds of the Reference Entity.
Want to learn more or express your interest?
Submit Your Expression of InterestEconomic calendar
World Economic Calendar
Week of 24 August 2026
| Date | Country | Event | Survey | Prior |
|---|---|---|---|---|
| 25 Aug 2026 11:30 | AU | RBA Minutes of Aug. Policy Meeting | — | — |
| 26 Aug 2026 11:30 | AU | CPI MoM Jul | — | -0.10% |
| 26 Aug 2026 11:30 | AU | CPI YoY Jul | — | 3.80% |
| 26 Aug 2026 11:30 | AU | CPI Trimmed Mean YoY Jul | — | 3.60% |
| 26 Aug 2026 22:30 | US | GDP Annualized QoQ 2Q S | 1.50% | 1.50% |
| 27 Aug 2026 22:30 | US | Wholesale Inventories MoM Jul P | — | 0.20% |
| 27 Aug 2026 22:30 | US | Initial Jobless Claims 22-Aug | — | — |
Source: Economic Calendar Data.
Market Insights
- RBA Holds at 4.35% – But the Door to Further Tightening Remains Open
- New: Earn 8.00% p.a. with the INEOS Group Credit-Linked Note
Key Points
- Australia: The RBA left the cash rate unchanged at 4.35% p.a. at its August meeting. June CPI eased to 3.8% p.a., while Trimmed Mean was unchanged at 3.60% p.a.
- United States: The Federal Reserve left the federal funds rate unchanged at 3.50%–3.75% p.a. at its July 2026 meeting. The latest U.S. CPI inflation rate is at 3.5% p.a. in June 2026. Core CPI moderated further to 2.6% p.a.
- United Kingdom: The Bank of England held the Bank Rate steady at 3.75% p.a., and headline CPI for June was 2.6% p.a., down from 2.8% in May. Core inflation was unchanged at 2.6% p.a.
- Eurozone: The European Central Bank left its key deposit facility rate unchanged at 2.25% p.a., and Euro area CPI eased to 2.9% p.a. in July.
| Region | Policy Rate | Latest Inflation (YoY) |
|---|---|---|
| Australia | RBA Cash Rate 4.35% p.a. | 3.8% p.a. to June 2026 |
| United States | Fed Funds 3.50–3.75% p.a. | 3.5% p.a. to June 2026 |
| United Kingdom | Bank Rate 3.75% p.a. | 2.6% p.a. to June 2026 |
| Eurozone | Deposit Facility Rate 2.25% p.a. | 2.9% p.a. in July 2026 |
RBA Holds at 4.35% – But the Door to Further Tightening Remains Open
As widely expected, the RBA left the cash rate unchanged at 4.35% this week. The more important question for fixed-income investors, however, is what sits behind the decision: inflation remains too high, while the Bank is still assessing how much of the tightening delivered earlier this year is flowing through to demand. Governor Michele Bullock has been clear that monetary policy operates with a lag. In her 28 July speech, she noted that “the full effects of increases in the cash rate from earlier in the year will take time to materialise.” She also said the Board remains focused on preventing elevated cost pressures from becoming entrenched and is prepared to increase the cash rate further if needed. That message remains relevant following the August decision. The RBA said inflation is still too high and that it will continue to assess how the economy is evolving. While financial conditions are now tighter following three increases in the cash rate earlier this year, the Bank continues to see upside risks to inflation. The August statement also indicated that inflation is not expected to return to around the midpoint of the target range until late 2027.RBA rate outlook
RBA Cash Rate & Implied Overnight Rate Outlook
Actual RBA cash-rate observations and the forward implied overnight-rate path on one continuous timeline.
Hover or tap any data point to see the exact date and rate.
Actual observations shown from 31 December 2024 to 11 August 2026. The implied-rate path continues from the latest actual observation through the supplied forward points to 14 December 2027, using the same y-axis scale.
Why does this matter for fixed-income investors? The appeal of sitting in cash or term deposits is understandable while short-term rates remain elevated. But that strategy comes with an important reinvestment risk. As restrictive monetary policy works through the economy, growth should moderate and inflation should continue to ease, creating the conditions for interest rates to fall again. When that happens, investors rolling maturing term deposits or reinvesting cash may find that the attractive yields available today are no longer available.
About INEOS Group
Founded in 1998, INEOS is one of the world’s largest privately owned chemical companies. Headquartered in London, the company operates approximately 154 manufacturing sites across 27 countries and employs around 26,000 people worldwide. Its growth has been driven by the strategic acquisition of chemical, refining and energy assets from major multinational companies. INEOS operates through a decentralised business model, with independent operating businesses focused on specific markets and products. Today, its operations span a broad range of sectors, including:- Petrochemicals
- Polymers
- Specialty chemicals
- Refining and energy (oil and gas)
- Automotive (INEOS Automotive, manufacturer of the Grenadier 4X4)
- Sports (including Formula One, professional cycling and football)
Investment Overview
| Issuer | C2 Specialist Investment Pty Ltd (ACN 622 433 043) |
| Product | INEOS Group – Credit Linked Security |
| Type | Fixed Income Investment |
| Coupon | 8.00% p.a., paid semi-annually |
| Term | 20/06/2031 |
| Currency | AUD |
| Min. Investment | $10,000 |
| Eligibility | Retail and Wholesale Investors |
Example: How Fixed Income Works
A company issues a debt security with the following terms:Important Risks
Capital invested in the Units is at risk. There is no capital protection or guarantee of financial return. The Units reference the credit of the Reference Entity and include a risk of capital loss in part or in whole as a result of Credit Event(s).
View all key risks
- Capital invested in the Units is at risk: There is no capital protection or guarantee of financial return in respect of your investment in the Units.
- Credit exposure to Reference Entity: The Units will reference the credit of the Reference Entity, therefore the Units include a risk of capital loss in part or in whole, as the result of Credit Event(s) occurring with respect to the Reference Entity.
- Credit Rating: Investors should be aware that credit ratings do not constitute a guarantee of the quality of the Units or the Reference Entity.
- Secondary Offer Period: Investors who purchase Units in the Secondary Offer Period at an Issue Price greater than the Initial Issue Price of $100.00 will receive a lower overall return, as the Final Value and Coupons are calculated with respect to the Initial Issue Price of $100.00 per Unit.
- Performance of the Reference Entity: Historical performance of the Reference Entity should not be taken as an indication of the future performance of the Reference Entity during the Investment Term.
- Value of the Units before the Maturity Date: The Final Value of the Units is calculated by reference to the Reference Entity and its overall creditworthiness between the First Credit Event Occurrence Date to the Scheduled Last Credit Event Occurrence Date. The market value of the Units before the Maturity Date will be determined by many factors and may be less than what you paid for the Units.
- Liquidity risk: You may not be able to realise your investment when you want to. The Issuer Buy-Back facility is at the discretion of the Issuer. Issuer Buy-Back requests are determined in the Issuer’s discretion.
- Early Maturity: The Units may mature early following an Early Maturity Event, including as a result of an Adjustment Event or Market Disruption Event or if a Credit Event or a Compulsory Early Redemption occurs or if your request for an Issuer Buy-Back is accepted.
- Indirect Investment Risk: Compared to a direct investment (including bonds) in the Reference Entity, the investor will not be entitled to receive dividend or other payments (if any) nor have any voting rights for corporate actions to do with the Reference Entity, including if a Credit Event occurs.
- Counterparty Risk: Investors are subject to counterparty credit risk with respect to the Issuer and the Hedge Counterparty.
An investment in the Units is not equivalent to an investment in the bonds of the Reference Entity.
Economic calendar
World Economic Calendar
Week of 17 August 2026
| Date | Country | Event | Survey | Prior |
|---|---|---|---|---|
| 17 Aug 2026 12:00 | CH | Retail Sales YoYJul | 1.50% | 1.00% |
| 18 Aug 2026 10:30 | AU | Westpac Consumer Conf SA MoMAug | — | 4.10% |
| 18 Aug 2026 10:30 | AU | Westpac Consumer Conf IndexAug | — | 83.9 |
| 18 Aug 2026 22:30 | US | Import Price Index MoMJul | — | 0.30% |
| 18 Aug 2026 22:30 | US | Import Price Index YoYJul | — | 7.10% |
| 18 Aug 2026 22:30 | US | Export Price Index MoMJul | — | -0.60% |
| 18 Aug 2026 22:30 | US | Export Price Index YoYJul | — | 10.20% |
| 19 Aug 2026 19:00 | EC | CPI YoYJul F | — | 2.90% |
| 19 Aug 2026 19:00 | EC | CPI MoMJul F | — | 0.20% |
| 19 Aug 2026 19:00 | EC | CPI Core YoYJul F | — | 2.50% |
| 20 Aug 2026 04:00 | US | FOMC Meeting Minutes29-Jul | — | 0 |
| 20 Aug 2026 11:30 | AU | Employment ChangeJul | — | 76.3k |
| 20 Aug 2026 11:30 | AU | Unemployment RateJul | — | 4.40% |
| 20 Aug 2026 11:30 | AU | Participation RateJul | — | 67.00% |
| 20 Aug 2026 22:30 | US | Initial Jobless Claims15-Aug | — | — |
Source: Economic Calendar Data.
Key Points:
- Australia: The RBA left the cash rates unchanged at 4.35% p.a. at its June meeting. May CPI eased to 4.0% p.a., while Trimmed Mean rose to 3.60% p.a. (up from 3.4%p.a. in April).
- United States: The Federal Reserve left the federal funds rate unchanged at 3.50%–3.75% p.a. at its June 2026 meeting. The latest U.S. CPI inflation rate is at 4.2% p.a. as of May 2026. Core CPI was more contained at 2.9% p.a.
- United Kingdom: The Bank of England held Bank Rate steady at 3.75% p.a., and CPI for May was 2.8% p.a., with Core CPI slowing to 2.6% p.a.
- Eurozone: The European Central Bank increased its key deposit facility rate by 0.25% to 2.25% p.a., and recent data show inflation in the euro area increased to 3.2% p.a. in May, up from 3.0% in April.
| Region | Policy Rate | Latest Inflation (YoY) |
|---|---|---|
| Australia | RBA Cash Rate 4.35% p.a. | 4.0% p.a. to May 2026 |
| United States | Fed Funds 3.50–3.75% p.a. | 4.2% p.a. to May 2026 |
| United Kingdom | Bank Rate: 3.75% p.a. | 2.8% p.a. to May 2026 |
| Eurozone | Deposit Facility Rate: 2.25% p.a. | 3.2% p.a. in May 2026 |
Australia’s May Inflation Drops to 4.0% p.a.
Sydney Airport 2030 Inflation-Linked Bond: A Great Way to Hedge Against Inflation
We are currently building a book for the Sydney Airport CPI+3.12% 2030 inflation-linked bond, which offers an attractive way to hedge your fixed income portfolio against inflation. Please email us or contact your advisor if you are interested.
How does an inflation-linked bond work?
Inflation-linked bonds are bonds where the value and/or interest payments increase with inflation. When inflation rises, the bond’s principal is adjusted upward, and the coupon is paid on the upward-adjusted principal. This helps protect your money’s purchasing power from rising prices.
UK Faces 7th Prime Minister in 10 years
Earlier this week, the sixth post-Brexit prime minister resigned. Keir Starmer, who won a landslide election less than two years ago, lost the trust of voters and many officials in his own party. The recent resignation of the British Prime Minister highlights a decade of political turmoil that began with the Brexit vote. As the country prepares for its seventh leader in ten years, deep-rooted economic challenges, exacerbated by leaving the European Union, remain severe enough that a simple change in leadership cannot resolve them.
US preliminary PMIs strengthened in June
US preliminary PMIs strengthened in June, with the S&P Global Composite PMI rising to 52.2 from 51.5 in May, signalling continued expansion in private-sector activity. The three-month average remains near 51.8, consistent with moderate economic growth and supportive of credit fundamentals. However, the S&P PMI continues to point to a softer growth backdrop than the ISM Composite Index, which is closer to 54 and implies stronger momentum.
Why is this important: The June PMI data indicate that US economic growth remains solid and has strengthened modestly from May. This reinforces a higher-for-longer Fed outlook by reducing the urgency for rate cuts.
*Data accurate as at 20.08.2026
Disclaimer: This webpage has been prepared by Australian Bond Exchange Pty Ltd ACN 605 038 935 AFSL 484453 (ABE). The information contained in it is of a general nature only. It was prepared without considering your financial needs, circumstances and objectives. Before investing in this security, you should consider whether it is appropriate for your circumstances and review the Master PDS and PDS. This website may contain links to other third-party websites, some of which require a subscription to read. Such links are for your convenience only, and ABE does not recommend or endorse these third-party sites. No representation or warranty is made as to the accuracy, completeness or reliability of any estimates, opinions, conclusions, or other information contained in this website. This website may contain certain forward-looking statements. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, and other factors, many of which are beyond our control. Past performance is not an indication of future performance. To the maximum extent permitted by law ABE disclaims all liability and responsibility for any direct or indirect loss or damage that you may suffer as a result of relying on anything on this webpage.