Australia's services sector continues to grow for the 20th consecutive month, even with a significant slowdown in September.
S&P Global Australia PMI Trends: The S&P Global Australia Services PMI fell to 52.4 in September, indicating growth but at the slowest pace since June, while the Composite PMI also decreased to 52.4, marking the weakest expansion in a year.
Market Performance: The S&P/ASX 200 Index rose 0.4% to around 8,950, supported by tech and healthcare stocks, and is on track for its best weekly gain since mid-July, while the Australian dollar increased to approximately $0.660, aiming for its first weekly gain in three weeks.
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Australia Maintains Interest Rate, Signals Inflation Concerns
Reserve Bank of Australia Decision: The Reserve Bank of Australia maintained its cash rate at 3.6% in its final meeting of 2025, reflecting market expectations and the lowest borrowing costs since April 2023.
Inflation and Economic Indicators: While inflation has eased since its peak in 2022, recent data indicates a potential rise in broader price pressures, prompting the bank to adopt a cautious approach in policy reassessment.
Market Reactions: Following the monetary policy decision, the Australian dollar increased to approximately $0.663, and government bond yields reached their highest level since November 2023.
Business Confidence Decline: The NAB Business Confidence Index fell to 1 in November 2025, the lowest since April, indicating weakening business sentiment amid a gradually rising unemployment rate and slowing employment growth.
Australia's Trade Surplus Expands to AUD 4.39B in October as Strong Exports Exceed Record Imports
Trade Surplus Growth: Australia's goods trade surplus increased to AUD 4.39 billion in October 2025, exceeding expectations and marking the largest surplus since July, driven by a 3.4% rise in exports, particularly in non-monetary gold.
Import Trends: Goods imports also rose by 2.0% to AUD 41.59 billion, reflecting strong domestic demand and early festive-season stocking, despite a decline in exports to the U.S. and China.
Market Performance: The S&P/ASX 200 Index rose 0.27% to around 8,570, with losses in gold stocks and rate-sensitive sectors offsetting gains in mining, while the Australian dollar strengthened to $0.661.
Economic Indicators: Despite a softer-than-expected GDP in Q3, the Australian economy continues to show growth, with a rebound in the manufacturing PMI signaling a return to growth.