Market Information Tuesday 26 August 2025

The Reserve Bank of Australia signalled that further rate cuts are likely in the months ahead, though the pace remains uncertain. Headline inflation slowed to 2.1% in July, down from 2.6% earlier in the year, while core inflation eased to 3.7%, its lowest since mid-2022. With unemployment holding near 4.0%, policymakers stressed that growth risks justify easing despite a resilient labour market.

The Resolution Foundation warned that U.K. unemployment could rise to 5.0% by early 2026, up from 4.4% currently. This would mark the highest level since early 2021, reflecting weaker hiring momentum and slowing consumer demand. With inflation still hovering at 3.2%, the Bank of England faces a difficult policy mix of softer labour conditions alongside above-target prices.

Emerging markets attracted over USD 7bn of inflows in August, driven by reallocations away from U.S. assets amid fiscal concerns. Emerging Markets equities rose 3.1% month-to-date, outpacing developed markets, while local-currency bonds saw yields compress by 15bps on average. Analysts highlight that persistent U.S. deficits near 6% of GDP and rising Treasury supply are pushing investors toward higher-yielding EM alternatives.

The 6M Euribor decreased with 2 basis points to 2.06% compared to previous business day. The 10Y Swap increased with 4 basis points to 2.71% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.