Sydney, January 22, 2026, 16:50 AEDT — The market has closed.
- Commonwealth Bank shares climbed 2.3% to A$150.61, ending a streak of losses.
- A surprise surge in employment data forced traders to reassess the chances of an RBA rate hike in February.
- Next week brings key inflation figures and CBA’s interim earnings report.
Shares of Commonwealth Bank of Australia climbed 2.3% to A$150.61 on Thursday, bouncing back after a roughly 2.2% drop the previous day. The jump pushed the nation’s largest lender back toward the front of the pack among major banks. 1
CBA matters because it’s a heavyweight in local portfolios and a major force behind the index. When rate expectations shift, CBA often moves swiftly, since changes in rates directly affect loan pricing, funding costs, and mortgage demand.
The rate debate intensified Thursday after a stronger-than-expected jobs report rattled markets. Australia’s unemployment rate dropped to 4.1% in December, while employment surged by 65,200—far exceeding forecasts. Market pricing now shows a 57% chance of an RBA hike on Feb. 3, up sharply from 29% before the data. UBS economists warned the labour market “still likely needs to ease” to ease inflationary pressure. Oxford Economics Australia’s Harry Murphy Cruise identified 3.2% as the key “magic number” for trimmed mean inflation—a gauge excluding extreme price swings—ahead of next Wednesday’s inflation update. 2
Australian shares gained as investors shifted back into rate-sensitive stocks. The S&P/ASX 200 ended 0.8% higher at 8,849, led by banks. The big four lenders rose between roughly 0.7% and 2.7% earlier, the ABC reported. KPMG chief economist Brendan Rynne noted the jobs data pointed to a stronger labour market than expected but emphasized that inflation still fuels rate uncertainty. 3
For bank investors, “rate-sensitive” means this: the stocks move based on expectations of where the cash rate will settle. Rising rates can boost banks’ earnings on loans compared to deposits, yet they also risk cutting borrowing and increasing bad debt if households struggle.
Overseas, the mood brightened as global markets held steady Thursday. Risk appetite got a boost after U.S. President Donald Trump backed off tariff threats and dismissed any plans to seize Greenland by force. 4
Yet the rally in CBA might reverse just as quickly. Should next week’s inflation data prove weak, traders might dump their February rate hike bets, dragging bank shares lower. On the other hand, a hotter reading would force the market to factor in a steeper tightening path and gauge borrowers’ resilience.
Key dates are coming up fast. Australia’s Q4 inflation figures drop Jan. 28, the RBA convenes Feb. 3, and CBA will release interim results Feb. 11 — offering an update on margins and mortgage demand. 5
