ASX Reaches New Record High on Jobs Data and Rate-Cut Bets
The Australian share market surged to another record high as September unemployment data highlighted a softer jobs market, reviving expectations for further cuts to the cash rate. Traders pushed risk assets higher on the prospect that the Reserve Bank of Australia (RBA) could ease policy to support a cooling economy while wage growth remains managed.
By late trading, the S&P/ASX 200 was trading decisively above previous peaks, with several sessions of gains lifting the index into new territory. Market participants linked the move to a combination of improved sentiment around inflation moderating in the near term and the belief that rate cuts could come sooner rather than later.
Key Drivers: Jobs Data and Rate-Cut Expectations
Official data showed Australia’s unemployment rate ticking higher, a development analysts described as “alarming” for households but potentially supportive of a more accommodative monetary stance. The ABS reported that unemployment rose to 4.5% in September, with job growth slowing to a tepid pace. The participation rate remained high, signaling that a resilient labour pool could still support consumer demand even as hiring slows.
Commentators noted that the rise in unemployment increases the odds of additional rate cuts by the RBA this year. Markets priced in roughly a 70% chance of a fourth cut, taking the cash rate to about 3.35%. Bond markets reflected this shift, with the 10-year yield dipping in response to softer employment numbers, illustrating the traditional inverse relationship between bond prices and yields.
Analysts at major banks observed that the data introduces a more cautious tone for inflation and growth, suggesting the central bank may prioritise labour market slack and downstream effects on inflation in its policy calculus.
Stock Spotlight: AMP and Gold Miners Lead the Charge
Within the equity complex, AMP led gains among large caps, rising more than 8% as investors rotated into financials seen as beneficiaries of a potential lower-rate environment. In materials, gold miners benefited from a bullion rally, with the price of gold bouncing above the US$4,200/oz mark on renewed demand for safe-haven assets amid rising geopolitical and global growth concerns.
Genesis Minerals also featured among top performers in the materials space, helping to push the sector higher as risk appetite improved.
Broader Market Snapshot
The ASX 200 finished the session with notable gains, logging a closing print above prior record levels. Across other markets, U.S. indices extended modest gains, while European equities traded in mixed territory. The Australian dollar softened slightly against the greenback as expectations for further rate reductions reduced the immediate yield advantage of the domestic currency.
In commodities, Brent crude rose modestly, with inventories and demand expectations continuing to influence price dynamics. Iron ore slipped marginally, reflecting ongoing supply and demand balancing in the steelmaking sector. Bitcoin and other risk assets experienced modest moves as traders assessed the macro backdrop and policy outlook.
Market Outlook
With unemployment showing signs of expansion but gauges of spare capacity improving in some pockets, analysts say the RBA could maintain a cautious easing path. The coming months will hinge on inflation readings and wage data. Investors will be watching the next round of quarterly inflation figures and the RBA’s statements for clues on the pace and timing of further cuts.
For now, market behavior suggests confidence that this pace of rate cuts could support equities and bonds alike, even as unemployment data creates near-term volatility. The key question remains how quickly policy will adapt to evolving labour market dynamics while keeping inflation on a manageable trajectory.
