Economic Watch — Week Ending 11 September 2026
Rates
The RBA has not met since holding the cash rate at 4.35% on 12 August. The next decision lands 29 September. The recent trail is unchanged:
- 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 front-end surge has plateaued at altitude. The AU 2-year printed 4.835% on 9 September (RBA statistical table F2) — dead flat on the week (+0.4bp) but +25bp on the month, and still ~48bp above the cash rate. That is the market holding its hike conviction for 29 September, not unwinding it. The 10-year sits at 5.202% (-1.8bp on the week, +17.8bp on the month), and 2s10s eased a touch to +37bp.
The action moved offshore. The US 10-year closed Friday at 4.98% after +21bp on the week — a genuine repricing, not noise — while the effective fed funds rate holds at 3.63% (10 September, NY Fed). The FOMC meets 15–16 September with a fresh Summary of Economic Projections, and the market is entering it with the long end knocking on 5%.
Housing
Friday closes, 11 September:
| Close | Day | Week | |
|---|---|---|---|
| GMG | 26.91 | -0.9% | -2.3% |
| SGP | 4.09 | -3.1% | -7.3% |
| SCG | 3.46 | 0.0% | -2.8% |
| VCX | 2.37 | -0.8% | -6.7% |
| MGR | 1.755 | -1.7% | -4.4% |
| GPT | 4.39 | -1.6% | -4.8% |
| CBA | 154.19 | +0.7% | -3.9% |
| WBC | 34.22 | +1.1% | -2.1% |
JHG — no quote again this run; the data-feed gap on both of its listings is now into its second week.
The divergence flagged here last week resolved — downward, and without waiting for the RBA. A complex that churned flat through a 25bp 2-year surge gave back 2–7% this week: SGP at -7.3% and VCX at -6.7% led the declines, the developers followed (MGR -4.4%, GPT -4.8%), and even GMG (-2.3%), the quality anchor of the group, could not hold the line. Note the split on Friday: the banks closed up on a down day for the index (CBA +0.7%, WBC +1.1%) — a defensive rotation that says the selling is about duration and discount rates on property cash flows, not credit stress. CBA still finished the week -3.9% with the tape.
Context
- ASX 200: 8741.2 on Friday, -0.9% on the day and -2.9% on the week — back from 9005.9 seven days earlier
- AUD/USD: 0.7156 Friday close, -0.6% on the week and drifting near 0.715 in Monday morning trade — easing despite a positive AU-US rate differential; risk-off flows are outweighing carry
- AU–US 10-year spread: +23bp (5.20% vs 4.98%)
- Next FOMC: 15–16 September — begins Tuesday — with a Summary of Economic Projections
- Next RBA: 28–29 September, decision 2:30pm AEST on the 29th
- Data vintage: AU yields are the RBA's last F2 print (9 September — the table runs a few days behind); equities are Friday's ASX close; the fed funds effective rate is 10 September; FX is Friday's close with Monday morning as spot
Eva's Read
Last week's question was whether housing equities were complacent or confident. Answer: complacent. The complex paid the bill for the rate repricing this week, and it did so with the RBA on the sidelines — no new hike, no fresh spike in AU yields, just the slow grind of a 5.20% 10-year doing discount-rate work on property cash flows. Prices falling without a new domestic catalyst is the market re-rating the level of rates, not reacting to news.
The 2-year's behaviour matters more than the equity tape. Parking at 4.84% — 48bp over cash — through a risk-off week means the hike conviction for 29 September survived the sell-off intact. If anything, weaker equities plus a firm 2-year is the classic pre-hike configuration, provided the RBA reads the equity damage as valuation reset rather than demand destruction.
The FOMC is the hinge, and it starts tomorrow. Three paths: a hawkish SEP pushes the US 10-year through 5%, drags AU yields with it, hardens the 29 September hike toward certainty and extends the REIT drawdown; a dovish surprise unwinds part of the +21bp, hands the complex a relief bounce and gives the AUD back its carry bid; and a split outcome — hold with balanced language — leaves the 2-year parked exactly where it is and rolls the resolution to the RBA's own statement in a fortnight.
The open question into the 29th: whether a week of -7.3% in SGP and -6.7% in VCX has already discounted 25bp — or whether it is only the first leg of a deeper re-rate if the Fed turns hawkish.
— Eva