Westpac IQ

A genuine cyclical upswing in private sector spending is underway. This is needed, not necessarily a reason to worry about inflation. There is too much pessimism about supply capacity.

We have left our September quarter GDP nowcast unchanged at 0.8%qtr and 2.3% in year-ended terms. New public demand was as expected while the upside surprise to net exports was offset by a run down in public sector inventories.

Private non-farm business inventories declined 0.9% in the September quarter. As a result, private non-farm business inventories are expected to detract 0.3ppts from economic growth in the September quarter.

The latest edition of Sustainability Impact considers some of the likely outcomes from the Solar Sharer electricity offer, what happened at COP30, new moves on Nature from the ISSB, plus an eye-opening paper on refrigerants, and more.

Australia has unique potential to become a regional data centre hub, with its future capability to meet the industry’s exponential renewable energy needs. But what will it take to get there?

How did the sustainable finance market move in Q3 2025? Our October wrap covers notable transactions in Australia and New Zealand, the latest market insights, the first Australian Sustainable Finance Taxonomy-aligned Green Bond and more.

The Australian dollar rebounded from its oversold levels last week, boosted by strong Oct. CPI and CAPEX figures. Subsiding angst around AI valuations, and a dovish Williams resuscitating Dec. Fed rate cut expectations, aided some recovery across equities. However, a relatively hawkish cut by the RBNZ took markets by surprise, with NZD rallying more than 1% on the day. After rallying more than a cent last week, AUD starts the week at 0.6540 and in fighting form. The week ahead is headlined by Aussie Q3 GDP, US core PCE for Sept. and global PMIs.

AI valuation angst and see-sawing Fed rate cut chances made for a messy week for global markets. The Australian dollar felt the blowback and traded to 3 month lows of 0.6421 before the NY Fed's Williams injected dovish hope into Dec. Fed meeting expectations. The week ahead features Australia's first complete monthly CPI, construction work done, private CAPEX and delayed US CPI and PPI data. Markets and Fed officials will also be pouring over the Beige Book. The RBNZ is expected to cut rates by 25bp.

The Australian dollar continues to underwhelm in the 0.65s despite last week's reassuring Oct. jobs data. As expected, unemployment ticked lower, restoring the idea of a gently rebalancing labour market. However, concerns around AI and tech stock valuations, weaker China Oct. activity data and the US govt. reopening saw AUD's momentum capped. The week ahead includes US Sept. jobs data, global PMIs, Fedspeak and a speech by RBA Asst. Gov. Sarah Hunter.