Sydney, May 18, 2026, 03:06 (AEST)
ASX 200 faces fresh rate nerves after falling 1.3% last week. Investors are fixing on the Reserve Bank of Australia’s policy minutes out Tuesday at 11:30 a.m. AEST.
Inflation is outpacing wage growth again. The consumer price index jumped 4.6% in the year to March, according to the Australian Bureau of Statistics, while wages increased 3.3% over the same period. That leaves parts of the market that are exposed to interest rates with less room for disappointment.
ASX cash market wasn’t open yet at the time of writing. Normal trading in Sydney is 09:59:45 to 16:00, with pre-open orders coming in before that and matched at the open.
Benchmark index slipped 9.9 points to 8,630.8 Friday, off 0.1%, as losses in miners weighed. Mineral Resources dumped 7.7% after managing director Chris Ellison sold A$122.5 million in shares. BHP, Fortescue, and Rio Tinto were down too, leaving materials to pull the market lower.
Banks are still a second swing factor in this market. Commonwealth Bank dropped 10.43% on Wednesday—its worst single-day fall—after it boosted provisions for potential Middle East risks and investors looked over planned budget changes to negative gearing, which lets property owners write off rental losses. Westpac, NAB and ANZ were down too. Morgan Stanley analysts flagged slower mortgage growth if housing turnover slips.
RBA lifts cash rate 25 bps to 4.35% at May meeting
The Reserve Bank of Australia hiked its cash rate by 25 basis points to 4.35%. Governor Michele Bullock said the board had “space to be alert” for inflation and downside risks. NAB chief economist Sally Auld saw risks skewed toward another rate move, but NAB still sees the RBA on hold for now. Reuters
Westpac chief economist Luci Ellis said more rate hikes “remain likely” this year, though she called the June decision “more finely balanced”. That puts some focus on Tuesday’s minutes, especially for banks, real estate investment trusts and growth stocks, since those sectors usually feel the squeeze when borrowing costs go up. Westpac IQ
Corporate sentiment isn’t looking much better. NAB’s April business survey put confidence well into negative territory again. Economist Michael Hayes said “rising prices and pressure on margins” were already weighing on activity and investment numbers. Reuters
Global markets are stirring up new worries. Reuters said Sunday investors are warning U.S. stocks could be missing the risks from inflation and geopolitics. The 30-year Treasury yield has gone past 5% and the 10-year is above 4.5%. Peter Tuz of Chase Investment Counsel told Reuters that inflation seems “embedded” and could pull markets down if it sticks around. Reuters
Oil is still the main risk for Australia’s inflation. Brent and U.S. crude each jumped over 3% on Friday, with optimism fading for a quick solution to ship attacks and seizures near the Strait of Hormuz, a key route for energy shipments.
The risk goes both ways. If Hormuz reopens and crude drops, bond yields could come off, the RBA might catch a break, and banks and miners could steady. If the disruption drags on, fuel costs stay high, rate-hike talk ramps up, and the ASX stays exposed to more losses. The RBA has already flagged that a drawn-out energy shock risks higher inflation and weaker growth.
Tape action is tight and jumpy for now. Bulls are looking for banks to steady and miners to resist global growth fear. Bears are watching the ASX 200’s Friday close near 8,630, seeing if it breaks ahead of the RBA minutes.
