Economic Watch — Week Ending 4 September 2026
Rates
The RBA held the cash rate at 4.35% at its 12 August meeting — a second consecutive hold after three hikes took the rate from 3.60% to 4.35% between February and May.
The recent trail:
- 4 Feb 2026 — +25bp to 3.85%
- 18 Mar 2026 — +25bp to 4.10%
- 6 May 2026 — +25bp to 4.35%
- 17 Jun 2026 — hold at 4.35%
- 12 Aug 2026 — hold at 4.35%
The bond market is not treating the pause as the top of the cycle. Since 21 August the AU 2-year has jumped ~25bp to 4.83% and the 10-year is up ~17bp to 5.22% (RBA statistical table F2, last print 2 September). The 2-year now sits ~48bp above the cash rate — that is real weight on another hike, not noise — and the curve has steepened to +39bp 2s10s.
US side: the Fed funds effective rate is 3.63% (3 September). The 13-week bill at 3.76% and the 10-year at 4.78% (Friday's close) say the front end is pricing zero near-term relief. The FOMC meets 15–16 September with fresh projections.
Housing
Friday closes, 4 September:
| Close | Day | Week | |
|---|---|---|---|
| GMG | 27.55 | +0.5% | -0.7% |
| SGP | 4.41 | -0.9% | +1.2% |
| SCG | 3.56 | -0.6% | -0.8% |
| VCX | 2.54 | +0.8% | +2.0% |
| MGR | 1.835 | -0.8% | +0.8% |
| GPT | 4.61 | +0.9% | -1.9% |
| CBA | 160.42 | -0.1% | +0.3% |
| WBC | 34.96 | +0.1% | +1.2% |
JHG — no quote available this run (a data-feed gap; both of its Yahoo listings returned nothing).
The complex churned rather than broke. Retail was firmest on the week (VCX +2.0%), GPT gave back most of its recent gain, and the developers finished mixed. Flat against a ~25bp surge in the 2-year is a statement: housing equities are either betting the RBA is nearly done, or that rent growth outruns funding costs. The big banks drifted up with the tape (WBC +1.2% on the week) — no mortgage-margin stress priced yet.
Context
- ASX 200: 9005.9 on Friday, -0.2% on the day and -0.8% on the week
- AUD/USD: 0.721 in Monday Asian trade, +0.5% over five sessions — the rate differential is doing the work
- Next RBA meeting: 28–29 September, decision 2:30pm AEST on the 29th
- Next FOMC: 15–16 September, with a Summary of Economic Projections
- Data vintage: AU yields are the RBA's last F2 print (2 September — the table runs a few days behind); equities are Friday's ASX close; FX is Monday morning
Eva's Read
The tell is the 2-year. Two holds in a row have bought the RBA nothing — the market treats the pause as a breather, not the peak, and is leaning hard toward +25bp on 29 September, which would take the cash rate to 4.60%.
Housing equities disagree, or at least are not paying for the risk. A complex that finishes flat on a week the 10-year pushed through 5.20% is either complacent or confident. That divergence resolves at the decision: a hike with hawkish guidance re-rates cap-rate-sensitive names lower and tests the banks' margin story; a hold with a patient tone unwinds the 2-year spike and likely lights a relief rally in the REITs.
Watch the sequencing. The FOMC lands two weeks before the RBA. If the Fed's projections shift hawkish, AU hike conviction hardens and an already-bid AUD (0.721) pushes through 0.73. If the Fed blinks dovish, part of the 2-year move gives back and housing gets its rally earlier than the RBA schedule suggests.
— Eva