Interest Rate & Market Commentary for Week Ending 11th July 2025
Weekly Overview
The major Australian stock indices ended the week ending July 11, 2025, with a slight decline, as the S&P/ASX 200 slipped 0.11% to close at 8,580.1, marking a pause after a 12% rally over the past 13 weeks.
The All Ordinaries fell 0.07% to 8,820.3, while smaller indices showed mixed results, with the Small Ords down 0.26% to 3,247.6, All Tech dropping 0.54% to 4,040.5, and Emerging Companies gaining 0.45% to 2,320.5. The week’s performance reflected a strong materials rally offset by weakness in tech and property, with global cues from the “One Big Beautiful Bill” (OBBBA) providing some support. Australian government bond yields rose modestly, with the 10-year yield increasing 4 basis points to 4.32%. The market digested the RBA’s decision to hold rates at 3.85%, tempering expectations for a rate cut, while global yields remained stable amid muted US market activity over the weekend. Iron ore prices reached a two-month high nearly $100 per tonne, boosting materials, while oil prices edged to $68 per barrel with steady Middle East conditions.
Investors reacted to the OBBBA’s $3.3 trillion stimulus and the tariff deadline extension to August 1, though uncertainty lingered as the RBA’s stance and US trade developments shaped sentiment. At the week’s end, the ASX 200 Volatility Index held at 14.5, slightly up from last week’s 14.2, indicating mild short-term jitters.
Economic data showed resilience, with materials leading despite broader weakness. The Australian dollar dipped 0.12% to 0.6581 US cents, reflecting commodity volatility. The focus shifts to the trading week starting Monday, July 14, with no immediate data releases but potential movement from trade and fiscal updates.
Overview of the US Equities Market
With US markets closed on Saturday and Sunday, the week’s equity performance reflected Friday’s losses, with the S&P 500 down 0.33% to 6,259.75 and the Nasdaq Composite slipping 0.22% to 20,585.53. The week’s decline, estimated at around 0.5%, was driven by profit-taking in financials and health care, though consumer discretionary and energy held gains, supported by the OBBBA.
The active trading highlighted NVIDIA Corp. (NVDA), up from 0.50% to $164.92 on 193.6 million shares, maintaining tech leadership, and NIO Inc. (NIO), gaining 5.69% to $3.90 on 141.5 million shares, fuelled by EV momentum. BigBear.ai Holdings Inc. (BBAI) fell 9.55% to $6.44 on 129.7 million shares, reflecting sector volatility.
The OBBBA’s tax incentives lifted sentiment, though the August 1 tariff deadline kept markets cautious. With earnings season approaching, focus turns to Monday’s market reopen, with no major data due until later in the week. The Cboe Volatility Index, steady at 16.5 pre-weekend, suggests moderate short-term risks.
Overview of the US Treasuries Market
US Treasury yields rose slightly in Friday’s close, with the 10-year note at 4.41% and the 30-year at 4.95%, each up 1 basis point daily. The week saw a modest uptick, with the 2-year yield at 3.88% and the 5-year at 3.97%, reflecting cautious sentiment amid the OBBBA’s fiscal stimulus.
The yield curve steepened, supported by a 65% chance of a September rate cut, with markets pricing two cuts by year-end, driven by the OBBBA’s impact versus trade uncertainties. Treasury Secretary Scott Bessent’s bank capital relief proposal added support. With markets quiet over the weekend, attention shifts to Monday’s reopen, with potential shifts from trade and fiscal developments.
Overview of the Australian Equities Market
Australian equities delivered a mixed week, with the S&P/ASX 200 closing at 8,580.1 on Friday, down 0.11% for the day, ending a 13-week rally with its third weekly loss. The recovery from earlier gains was led by materials, though Friday’s session saw broad weakness outside the sector.
The ASX 200 Materials Index rose 1.82% weekly, with BHP up 2.8%, Rio Tinto up 2.3%, and Fortescue gaining 2.9% on iron ore strength. Rare earths miners Lynas (+16.7%) and Iluka (+22.9%) surged on a $400 million Pentagon investment. Financials fell 0.49%, with Commonwealth Bank down 0.8%, while property dropped 1.51%, led by Goodman Group (-1.8%), and tech fell 1.06%, with Xero down 1.5%. Breadth was weak, with 58% of constituents closing lower. The OBBBA’s global boost tempered losses, but the RBA’s hold at 3.85% fuelled caution.
Overview of the Australian Government Bond Market
Australian government bond yields posted gains for the week ending July 13, 2025, with the 10-year yield rising 4 basis points to 4.32% on Friday. The 2-year yield climbed 2 basis points to 3.40%, the 5-year increased 3 basis points to 3.71%, and the 15-year rose 4 basis points to 4.66%, reflecting the RBA’s steady 3.85% rate stance.
The uptick followed the RBA’s decision, reducing the immediate likelihood of a July cut, though markets still price four cuts (100 basis points) by mid-2026. The Australian dollar fell 0.12% to 0.6581 US cents, pressured by commodity shifts. Focus shifts to Monday’s market open amid global fiscal and trade developments.
Looking Ahead: Major Economic Releases for the Week Ending 11th July
For the week ending July 18, 2025, U.S. economic data will be in the spotlight, with Core CPI (MM and YY) and headline CPI (MM and YY) expected to show rising inflationary pressures, with consensus forecasts indicating month-on-month increases of 0.3% for both Core and headline CPI, and year-on-year figures climbing to 3.0% and 2.7%, respectively. Industrial Production is anticipated to rebound slightly to 0.1% from -0.2%, while the Philly Fed Business Index may improve marginally to -1 from -4, suggesting cautious optimism in manufacturing sentiment.
In Australia, Employment data is expected to show a gain of 20,000 jobs, recovering from a prior decline of 2,500, with the Unemployment Rate holding steady at 4.1%. These releases could signal resilience in Australia’s labour market, though global trade uncertainties, including U.S. tariff policies, may continue to pose risks to both economies.
| Date | Country | Release | Consensus | Prior |
|---|---|---|---|---|
| Tuesday, 15/07 | United States | Core CPI MM, SA | 0.3 | 0.1 |
| Tuesday, 15/07 | United States | Core CPI YY, NSA | 3 | 2.8 |
| Tuesday, 15/07 | United States | CPI MM, SA | 0.3 | 0.1 |
| Tuesday, 15/07 | United States | CPI YY, NSA | 2.7 | 2.4 |
| Tuesday, 15/07 | United States | CPI Wage Earner | n/a | 314.839 |
| Wednesday, 16/07 | United States | PPI Machine Manuf'ing | n/a | 189.4 |
| Wednesday, 16/07 | United States | Industrial Production MM | 0.1 | -0.2 |
| Thursday, 17/07 | Australia | Employment | 20 | -2.5 |
| Thursday, 17/07 | Australia | Unemployment Rate | 4.1 | 4.1 |
| Thursday, 17/07 | United States | Philly Fed Business Indx | -1 | -4 |
For more detailed weekly updates, YieldReport Weekly_11th July 2025