ASX Reaches a Leap Forward on Jobs Data
The Australian share market jumped to a fresh record, supported by a surprising twist in the jobs data that revived expectations for further Reserve Bank of Australia (RBA) rate cuts. The S&P/ASX 200 surged through intraday trading and closed at a new peak, underscoring how a weaker labour market can paradoxically bolster risk assets when it signals potential monetary easing.
Unemployment Rises, But Markets See Opportunity
New unemployment figures showed a rise in the September reading, with analysts attributing the uptick to weaker job creation in the month. Investors, however, interpreted the data through the lens of monetary policy. With fears of higher rates easing, market participants anticipated the RBA could pivot toward additional cuts, helping lending costs ease and supporting equities that benefited from lower discount rates.
The day’s market snapshot indicated broad strength across the Australian market: the ASX 200 posted gains, while key global indices showed varied moves, and gold held a steady bid as a safe-haven alongside ongoing interest in precious metals and AI-driven themes.
Stocks and Sectors in Focus
Within the ASX 200, AMP was among the standout performers, rising robustly as investors chased resilience in a volatile macro backdrop. Gold miners also led gains as bullion prices surged past the $4,200/oz mark, reflecting a confluence of safe-haven demand and inflation concerns. Across the sector, materials benefited from gold price strength, while other industrials tracked risk-on sentiment as rate-cut bets took hold.
RBA Rate-Cut Bets Intensify
The overnight move in bond markets mirrored the growing conviction that the RBA would pursue another rate reduction within the year. The futures market priced in a high probability of an additional 25-basis-point cut, lifting expectations for the cash rate to roughly 3.35%. With the long-end yields moving in step, the yield curve reflected a shift in risk assessment, weighing on bond prices as investors priced in lower rates ahead.
Analysts highlighted the delicate balance for policymakers. While the unemployment rate rose, broader measures of slack in the labour market suggested that the economy could absorb further easing without derailing growth. The discourse among economists centered on whether inflation dynamics would permit the RBA to cut again as growth signals wavered and services prices evolved.
What This Means for Investors
For investors, the message is twofold: a stronger equity market in the near term could coexist with softer labour market signals, and rate-cut expectations can act as a tailwind for equities by lowering discount rates and supporting consumer and business spending. Traders will watch closely how the quarterly inflation data and the next employment print shape the policy path.
Beyond Australia, global markets showed a mixed response as investors recalibrated expectations around monetary policy and growth trajectories, with crude oil trading modestly higher and crypto assets remaining within recent ranges. The environment remains one where data surprises, whether on inflation or jobs, can realign asset prices quickly.
Bottom Line
As the ASX 200 closes at record highs, the day’s data underscores a pivotal theme: in a landscape of easing bets, equities can rally even in the face of rising unemployment if investors expect policy accommodations that sustain liquidity and growth. The coming weeks will be telling as inflation readings and the next labour market reports influence the timing and pace of future rate cuts.
