SYDNEY, Jan 17, 2026, 17:23 AEDT — Market closed
Westpac Banking Corp (WBC.AX) shares closed Friday up 1.82% at A$39.19, after swinging between A$38.35 and A$39.34. Investors stepped back into Australia’s major banks ahead of the weekend. (Investing)
It’s significant now because banks are once again carrying the local market, often steering the mood when traders get jittery over interest rates. The S&P/ASX 200 climbed 0.48% on Friday and closed the week 2.1% higher, staying close to an 11-week peak. (CommBank)
Westpac led the big four banks higher, outpacing its peers who each added roughly 0.5%. Macquarie Group surged 2.6%, according to MarketIndex’s closing summary. Such a rally among major financial stocks tends to overshadow softer sectors elsewhere. (Market Index)
Part of the momentum traced back to abroad. Reuters flagged a stronger Wall Street showing earlier Friday, lifted by U.S. banks and chipmakers. Still, weaker commodity prices capped gains for miners. (Business Recorder)
In U.S. markets, the dollar hovered close to a six-week peak as traders scaled back bets on imminent Federal Reserve rate cuts. Ameriprise chief market strategist Anthony Saglimbene described stocks as “flat-lining” ahead of upcoming earnings reports. Shifts in global yields and the greenback often ripple through Australian bank funding costs and risk sentiment. (Reuters)
Domestically, Westpac economists Ryan Wells and Illiana Jain noted that households have swiftly adjusted to the prospect of higher mortgage rates. Still, the bank maintains that the RBA “does not need to tighten policy this year.” The cash rate, which is the RBA’s key policy interest rate, influences loan pricing, deposit rates, and credit demand. (WestPaciQ)
Bank rallies, however, can be fragile. Should inflation shocks push central banks to tighten more aggressively, or if wholesale funding costs rise alongside global yields, the sector’s valuation premium could evaporate quickly.
Westpac is operating against that backdrop. Its most recent annual results revealed a drop in profit, hit by tougher mortgage competition squeezing the net interest margin — the gap between loan earnings and deposit costs — while expenses climbed due to restructuring and tech investments. (Reuters)
Traders gearing up for the week will focus on Australia’s labour force data, the Westpac–Melbourne Institute Leading Index, and the Melbourne Institute inflation gauge. Offshore, eyes will be on China’s Q4 GDP and the U.S. PCE deflator—the Fed’s favored inflation metric. (WestPaciQ)
The next major domestic rate event is the Reserve Bank of Australia’s first Monetary Policy Board meeting of 2026, set for Feb. 2–3. The decision statement will be released on Feb. 3 at 2:30 p.m. AEDT. (Reserve Bank of Australia)
Westpac’s next major event is its first-quarter results report on Feb. 13, followed by interim results and a dividend decision slated for May 5, as outlined in the bank’s financial calendar. (Westpac)
