The global macroeconomic backdrop shifted notably in the week ending 23 November 2025, contributing to a significant risk-off sentiment that heavily impacted Australian equities. In the United States, a mixed labour market report showing rising unemployment alongside stronger-than-expected job additions, combined with firm Services PMI data and Federal Reserve minutes signalling a delay in rate cuts, led to a repricing of interest rate expectations.
Global markets rallied on hopes of a resolution to the U.S. government shutdown, though the Fed's caution dampened expectations for a December rate cut. In Australia, robust employment data and a resilient labour market have reduced near-term expectations of an RBA rate cut. The ASX posted its weakest week in four months amid sector rotation and global tech selloffs.
Last week, Australian financial markets and economic sentiment were shaped by persistent domestic inflation, a cautious stance from the Reserve Bank of Australia (RBA) and mounting global headwinds.
Global markets remained volatile as persistent inflation and geopolitical tensions reduced expectations of near-term Federal Reserve rate cuts. In Australia, high living costs, elevated fuel prices, weak consumer sentiment, and mortgage stress continue to constrain domestic demand, while the RBA maintains a cautious higher-for-longer policy stance.
Global markets were volatile as higher US rates and Saudi pipeline disruption lifted oil costs, strengthened the dollar and pressured risk assets. Australia faces slowing growth, persistent inflation and a cautious ASX, with healthcare resilient while materials, technology and real estate weakened.
Australian shares weakened as persistent inflation, higher bond yields and softer domestic activity weighed on sentiment. Resource stocks showed relative strength, while the RBA’s September 29 rate decision and guidance remain key near-term market catalysts.
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