Sydney, Jan 28, 2026, 17:40 (AEDT) — Market closed.
- ANZ shares slipped on Wednesday as traders adjusted their rate expectations following inflation data
- Markets are pricing in a rate hike by the RBA on Feb. 3, with major banks now expecting the central bank to raise rates
- ANZ announced plans to redeem A$1.25 billion of subordinated notes next month, signaling a move in the capital markets
ANZ Group Holdings shares slipped roughly 0.5% to close at A$36.39 on Wednesday, as a hotter-than-expected inflation report revived bets on an imminent rate hike. The stock fluctuated between A$36.16 and A$36.69 throughout the day. (Yahoo Finance)
With markets closed until Thursday, attention quickly shifts to the Reserve Bank of Australia’s February decision and the signals it sends about future moves. For bank stocks, it’s rarely just about a single rate change. The trajectory matters more.
Rates cut both ways for lenders. While higher loan pricing can bolster margins, rising funding costs also pose a threat. And if policy tightens amid a slowdown, borrowers might start to buckle.
Core inflation in the December quarter outpaced expectations, with the trimmed mean CPI — which excludes volatile items — climbing 0.9% for the quarter and 3.4% year-on-year, surpassing the RBA’s 2%-3% target range. The market now prices a roughly 73% chance of a rate hike in February, up from about 60%, Reuters reports. (Reuters)
The S&P/ASX 200 dropped 0.09% to 8,933.9, ending a three-day winning streak following the release of new data. The Australian dollar also fell, slipping below 70 U.S. cents late in the session. Adam Boyton, ANZ’s head of Australian economics, now expects a 25-basis-point hike on Feb. 3, calling it a one-off “insurance” move. Meanwhile, Betashares chief economist David Bassanese said the Reserve Bank has “little choice” but to raise rates, possibly twice in the first half. (ABC)
Australia and New Zealand Banking Group Ltd announced it will redeem A$1.25 billion of floating rate subordinated notes on Feb. 26, following approval from regulator APRA. The bank stressed the move “does not imply” it will make similar decisions on other debt instruments.
Subordinated notes rank below senior debt in the capital hierarchy and help banks satisfy regulatory capital rules. Equity investors typically focus on what comes next: how the bank handles refinancing and the price it pays, especially as market conditions shift rapidly with changing central-bank outlooks.
ANZ is shrinking its presence in Asia, aiming to consolidate its Singapore team into one city-centre office by the second half of 2026. The bank said the relocation is designed “to better support how we work today and into the future,” according to the Straits Times. (The Straits Times)
The competitive landscape is clear. Other top Australian banks are also hinting at a February change, and how they frame mortgage competition and deposit pricing often carries as much weight as the actual rate decision.
That said, the scenario carries risks either way. Should the RBA shrug off the inflation surprise and keep rates steady, bank shares might bounce back while the currency drops, relieving some strain on wholesale funding. On the flip side, if the central bank raises rates and signals more hikes ahead, markets could brace for further tightening — a tougher environment for credit growth and rising arrears.
ANZ and its peers face their next major test with the RBA decision on Feb. 3. All eyes will be on whether the central bank signals a one-off insurance move or hints at a more extended shift. Then, the capital note redemption on Feb. 26 will serve as a key gauge of funding sentiment.
