Sydney, March 3, 2026, 17:40 AEDT — Market closed
- Westpac finished unchanged, steadying after Australian bank stocks took a dive the previous day.
- Rate bets moved after the RBA flagged its March meeting as “live”.
- Attention shifts to Wednesday’s GDP data and the policy decision set for March 17.
Westpac Banking Corporation (WBC.AX) closed flat at A$41.80 on Tuesday, holding the line after shedding 1.74% in the previous session. Shares moved in a range of A$41.45 to A$41.93, with roughly 3.40 million shares traded.
Reserve Bank of Australia Governor Michele Bullock left the door open to a rate hike this month, telling a Sydney summit the March meeting was “live” and noting the board could move if inflation expectations look threatened. Three-year government bond yields shot up 13 basis points to 4.313%. Traders were quick to price in roughly a 30% chance of a quarter-point hike on March 17, with a May hike now seen as certain. Wednesday’s fourth-quarter GDP numbers have become the next focus. Commonwealth Bank and National Australia Bank both nudged their growth forecasts up to 1%, while Westpac is at 1.1%. CBA’s Ashwin Clarke said the recent batch of data “lifts the risk of March” but still sees May as more likely. Reuters
Banks are stuck in a feedback cycle: rates shape both what they pay for funding and how they price loans, with household wallets and business appetite steering credit growth. Net interest margin—the gap between income from loans and what’s shelled out to depositors—moves up or down depending on the pace of rate changes and the intensity of competition for lending.
Selling accelerated across the region, pulling the S&P/ASX 200 down by 123 points, or 1.34%, to 9,077.30, with crude prices still running high. Independent economist Saul Eslake described the bond market’s shift as a “direct response” to Bullock’s comments. Short-term debt markets, he noted, are now pricing in two more rate hikes—one set for March, another for May. ABC News
Monday didn’t start pretty for banks. The S&P/ASX 200 Financials index tumbled as much as 3.1% right out of the gate, with the major lenders all deep in the red—off between 2% and 3% at their lows. Westpac dropped 2.84% to trade near A$41.33 in the early selloff, while NAB, ANZ, and CBA also took hits before losses across the sector began to ease.
Oil’s jump and a broader pullback in risk assets rattled sentiment. Wall Street closed with only slight moves after a whipsaw session tied to U.S.-Israeli air strikes on Iran. U.S. crude surged nearly 6%, settling at $71.23 a barrel, according to Reuters.
Westpac’s last big catalyst landed back in mid-February, after it beat first-quarter profit forecasts and flagged steady credit demand. Shares surged to a record A$42.130. The bank posted unaudited net profit of A$1.9 billion, with its core net interest margin slipping three basis points to 1.79% under heavy mortgage pressure. CEO Anthony Miller summed up the mood: “We are optimistic on the outlook for the economy and expect demand for both business and household credit to remain resilient.” Reuters
The next set of data might jolt sentiment either way. Weaker GDP or a break in oil prices could cool down those March-hike expectations and ease up on bond yields. But if the numbers come in strong, markets will likely stick with the prospect of tighter policy — not ideal for loan growth, and margins stay squeezed.
Eyes turn to Wednesday’s session, with traders zeroing in on the GDP print and any signs rate markets stick to that March 17 shift. On the corporate side, Westpac wraps its half-year on March 31, with interim results and a dividend decision expected May 5.
