Month: August 2025

A higher-than-expected jump in inflation figures may prompt the RBA keep interest rates on hold at this month’s meeting. Headline CPI climbed to 2.8%, up from 1.9%. The trimmed mean, the RBA’s preferred gauge of underlying inflation, also rose to 2.7% in July from 2.1% in June.

Markets responded cautiously, though the S&P/ASX 200 still edged higher for the month and notching another all-time high. The rally was driven by mining and banking stocks.

The unemployment dipped slightly to 4.2% in July and business confidence is upbeat. The number of Australian businesses rose by 2.5% over the past financial year to more than 2.7 million. Total wages and salaries increased 5.9 per cent year-on-year. The momentum appears to be lifting consumer sentiment with the Westpac-Melbourne Institute Index posting a solid gain 5.7% in August, a 3.5 year high.

As Aussie dollar finished the month at US65c and continues to be shaped by global factors.

In the US, the S&P 500 hit records highs, led by tech giants, as investors weighed tariff impacts and speculated on future rate cuts.

Interest rates and tariffs continue to influence markets globally.

In Australia, soft inflation data has paved the way for a possible rate cut. CPI slowed more than expected to an annual rate of 2.1% from 2.4% and core inflation – the RBA’s preferred measure – fell to 2.7% from 2.9%.

US interest rates were kept steady in July despite pressure from President Trump. The greenback eased in response, providing a small boost to the Australian dollar, which has been on a rollercoaster ride in recent times

The US S&P 500 and Nasdaq 100 continue to record all-time highs as tariffs begin to be locked in and AI investment takes off.

Meanwhile, the S&P ASX 200 experienced another volatile month, but the trend continued upwards and included an all-time high.

There are also signs of consumer optimism. The July Westpac–Melbourne Institute Consumer Sentiment Index found consumers buoyed by the chance of interest rate cuts this year.