PRFA Reports
Economic update September 2025
Equity market returns were mixed in September, with global equity markets delivering reasonably strong gains, while Australian equities experienced a modest decline (retreating from August's record high). Emerging Market equities were the best performers, led by Asian regions. Bond markets experienced relatively minor moves, and within Commodities, Gold rose sharply. In the US, the Federal Reserve (the Fed) cut interest rates by 25 basis points, while in Australia, the RBA kept interest rates on hold at 3.60% and indicated that any rate cuts are now likely delayed. Labour markets in Australia remain stable but mildly tight.
The RBA reduced the cash rate by 025% to 3.6%, as the Board became confident that inflation has sustainably moderated. Commentary from the RBA indicated that they were comfortable with the level of inflation and that their policy priority is maintaining full employment in the economy. Over in the US, equity markets and bond yields fell sharply at the start of August with investors starting to think that a rate cut in September is likely. Their September employment report will be closely monitored.
Commodity performance was mixed, with iron ore and gold advancing while oil retreated.
Policy uncertainty across key economies, continues to cloud the global outlook, but investor sentiment has managed to improve - but geopolitical tensions, evolving central bank stances and uneven global growth remain key sources of potential market disruption. In this environment, a patient, flexible investment approach anchored in fundamentals remains essential.
Investor Insights - June 2025 quarter
Global markets brush off uncertainty, but economic risks remain.
Australian economic growth remains anaemic, but it's believed that a more favourable policy backdrop characterised by subdued inflation, fiscal support and rate cuts should help support economic activity.
The 2025 financial year unfolded in two distinct phases. The first six months were marked by strong equity market performance, supported by solid corporate earnings, stable economic growth, and
declining inflation trending towards central bank targets. Then, as the calendar year began, geopolitical uncertainty took hold, with US trade policy becoming a key concern for markets.
Fears over the impact of tariffs on inflation and growth prompted an investor shift away from US equities, increased interest in European markets, and greater volatility in bond yields. Investor demand for gold also rose as risk aversion returned to the forefront.
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As we post this update, the RBA has just announced its decision to keep rates on hold, in what is being called a surprise decision. The RBA Governor said, however, that further relief was likely, with the outcome of the June quarter inflation report (released at the end of July) being the key factor. AMP Chief Economist, Shane Oliver, expects the RBA to cut in August & November this year, and then February 2026. Westpac IQ concurs with this view.
Investor Insights - March 2025 quarter - some in-depth analysis
PRFA Trump Tariff - April 2025
Economic Update December 2024 - year in review
Economic Update September 2024
Economic Update - 2024FY in review
Economic Snapshot - 2023 in review
Economic update - October 2023
Economic update - September 2023
Economic Update - February 2023
Economic Update - January 2023
Economic Update - November 2022
Economic Update - October 2022
Economic Update - September 2022
Economic update - February 2022
Economic update - FY summary - June 2021
Market watch - Top 3 themes - Feb 2021
