SYDNEY, February 3, 2026, 16:55 AEDT — The market has closed.
- ANZ shares ticked up 0.08% to close at A$36.78, swinging between A$36.61 and A$37.40 during the session.
- The RBA raised the cash rate by 25 basis points to 3.85%, altering the interest rate environment for Australia’s major banks.
- Coming up: RBA minutes set for Feb. 17, with ANZ’s Q1 trading update dropping Feb. 12.
ANZ shares closed 0.08% higher at A$36.78 on Tuesday, following the Reserve Bank of Australia’s rate hike that refocused traders on tightening. The stock fluctuated between A$36.61 and A$37.40. (Investing)
The move matters because ANZ and its peers sit at the centre of Australia’s rate cycle. While a higher cash rate can boost bank spreads, it can also hit borrowers hard and dampen credit growth—a combination that the market finds tricky to price accurately.
The RBA lifted the cash rate target by 25 basis points to 3.85%, marking its first increase in two years. Officials cited faster-than-expected growth and persistent inflation pressures above target. They also highlighted robust private demand alongside a tight labour market. (Reuters)
The central bank’s policy statement noted that inflationary pressures “picked up materially” in the latter half of 2025 and highlighted uncertainty over whether current conditions are restrictive enough to push inflation down. It said it will keep a close eye on demand and inflation expectations moving forward. (Reserve Bank of Australia)
The new forecasts lean hawkish, despite cautious wording. The RBA’s quarterly outlook factors in around 60 basis points of rate hikes this year—but that’s a technical assumption, not a commitment. It projects underlying inflation, measured by the “trimmed mean” that excludes volatile price swings, to hit 3.7% by June. Headline inflation is expected to peak at 4.2% around mid-year. (Reuters)
David Bassanese at Betashares said the Reserve Bank had “bared its teeth” on inflation but warned it’s still too early to tell if a single hike will be enough. (ABC News)
For ANZ, the crucial issue is if rising rates boost the net interest margin — that is, the difference between earnings on loans and costs on deposits and funding — without sparking a surge in credit losses. Deposit competition also plays a role, capable of eroding gains fast.
Commonwealth Bank of Australia, National Australia Bank, and Westpac Banking Corp are all grappling with similar pressures. Traders are closely monitoring how fast these lenders shift mortgage and savings rates, alongside any signs of credit demand weakening in the coming weeks.
The trade could shift if the RBA continues tightening amid a slowing economy. A bigger rise in arrears or a stumble in housing activity would force a rethink of the sector’s earnings assumptions.
The next policy update will come with the RBA minutes on Feb. 17. Following that, the rates decision is set for March 17, after the March policy meeting. (Reserve Bank of Australia)
ANZ is set to release its first-quarter trading update on Feb. 12. Investors will focus on loan growth, margins, and bad-debt trends as the interest rate narrative shifts. (ANZ)
