Sydney, Jan 8, 2026, 17:23 AEDT — Market closed
- Westpac rose 1.3% on Thursday after two straight declines
- RBA officials signalled inflation is easing but still above target
- Focus shifts to Jan 28 CPI and Westpac’s Feb 13 quarterly update
Westpac Banking Corp shares (WBC.AX) last traded at A$38.01, up 1.3% on Thursday, paring losses from earlier in the week as investors weighed softer inflation against a still-wary central bank tone. 1
The move matters because Australia’s big banks have been trading day-to-day as a proxy for the interest-rate path. Data showed annual consumer inflation slowed to 3.4% in November from 3.8% in October, while the trimmed mean — a core measure that strips out big price swings — eased to 3.2%. The next major read, December-quarter CPI, is due on Jan. 28. 2
Reserve Bank of Australia Deputy Governor Andrew Hauser said inflation “above 3%” was still “too high”, according to an ABC interview cited by Reuters, and noted policymakers would look at the broader economy rather than hang a decision on any single print. The cash rate is 3.6%. 3
Westpac chief economist Luci Ellis called the inflation outcome a “very pleasant surprise” in comments carried by ABC, while warning the numbers have been noisy, including around electricity rebates rolling on and off. 4
Bank stocks had been under pressure after the CPI release, with Westpac shedding 1.8% on Wednesday as investors sold rate-sensitive names, ABC’s market coverage showed. National Australia Bank fell 2% the same session, the report said. 5
Westpac has swung hard this week. It fell 2.2% on Tuesday and 1.75% on Wednesday, before Thursday’s bounce, with A$37.52 marking a near-term floor traders have been leaning on. The stock was back below A$39, an area it traded around early in the week. 6
Broader rate signals have also been shifting. Australian bond yields eased again on Thursday after the CPI print, according to MarketIndex commentary, a move that tends to feed straight into bets on what the RBA does next. 7
But there’s a catch. If the next inflation round runs hot, rate-hike talk comes back quickly and bank stocks can get clipped again on valuation, even as higher rates can lift margins. If inflation cools faster than expected, the debate flips — and investors start asking how long bank earnings can lean on wide spreads.
