SYDNEY, Jan 28, 2026, 16:46 AEDT — Market closed
- National Australia Bank shares closed up 0.3% at A$42.99
- Hotter core inflation sharpened expectations of an RBA move next week
- Traders now focus on the Feb. 3 rate decision and what it means for bank margins and credit demand
National Australia Bank Ltd shares edged higher on Wednesday, ending up 0.26% at A$42.99, even as the broader market softened after an inflation surprise forced investors to rethink the rate outlook. 1
For NAB and its big-four peers, the near-term story is less about bank-specific headlines and more about where the cash rate goes. Higher rates can support lending margins, but they also raise the odds that loan growth slows and borrowers feel the squeeze.
Fresh data showed underlying inflation in the December quarter ran hotter than expected, pushing markets to lift the implied probability of an interest-rate increase next week. “An interest rate adjustment would help ensure inflation returns to the target,” ANZ’s head of Australian economics Adam Boyton said. 2
The inflation beat landed awkwardly for a market that had been leaning toward policy staying on hold. Electricity prices and rents were among the drivers flagged in coverage of the release, adding to the sense that price pressures are proving sticky into 2026. 3
NAB’s own read on the economy has also leaned away from the “cooling” story. The bank’s monthly business survey showed business conditions improved in December and capacity use stayed elevated, with chief economist Sally Auld saying it was “consistent with the view that momentum improved” late in the year. 4
Put together, the data flow leaves investors stuck with two competing impulses: banks usually like a little more rate, but not if it comes with weaker credit demand or a lift in loan stress. That tension showed up in NAB’s small move on the day.
There are other ways this can go wrong for the bulls. If the central bank chooses to lean against market pricing, or signals it is prepared to look through another hot print, bank shares could lose a key prop.
For now, the next session hinges on whether the rate repricing continues, not just in bank stocks but in bond yields and the Australian dollar.
The next clear marker is the Reserve Bank of Australia’s policy decision on Feb. 3, when it updates the cash rate target and releases its statement. 5
