The Morning Bull - Australian Market Morning Update Sunday, 25 Oct 2026
Australian shares are set for a softer open, with SPI futures pointing lower as investors focus on the US Federal Reserve. The key issue is not this week's expected hold on rates; it is what comes next.
US data shows a mixed picture. Recent inflation readings and manufacturing and services PMIs indicate firm activity alongside ongoing price pressures. That combination has kept alive the possibility of a December hike and lifted global volatility gauges such as US and European equity volatility futures.
This uncertainty around the Fed path feeds directly into Australian borrowing costs through global bond markets, influencing everything from bank funding spreads to equity risk premiums. Higher perceived rate risk tends to pressure growth-sensitive areas most, while more defensive cash flow sectors can see relative support as investors reassess earnings durability.
The unresolved question is simple: does the Fed stick with a prolonged pause if US growth remains firm, or lean back toward tightening into year end? Upcoming Fed commentary and the US decision on 28 October will shape how far today's cautious tone on the ASX extends.
Stocks to Watch Before the Opening Bell
Yancoal Australia (YAL)
Yancoal Australia has renewed long term coal sales framework deals with Yankuang Energy and YIT from 1 January 2027 to 31 December 2029, with annual caps of US$300 million and US$900 million. The agreements cover up to 6 million tonnes a year plus up to 2 million tonnes of spot cargoes, all tied to the API5 index.
Financial assistance linked to the Kestrel Coal Group acquisition, including guarantees over A$1.5b and US$1.4b of facilities, will also go to an Extraordinary General Meeting. Watch the EGM timetable, the independent expert findings, and any conditions around these related party arrangements.
Top Movers
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Commonwealth Bank of Australia (ASX:CBA)jumped 4.35% as traders reacted to fresh CommBank commentary on inflation and RBA risks.
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Objective (ASX:OCL)gained 4.29%.
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Wesfarmers (ASX:WES)advanced 3.76% as consumer discretionary leaders drew interest despite volatility in resources and broader indices.
Top Losers
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Zip Co (ASX:ZIP)fell 29.47% after revealing a US$10 million US fraud incident that affected Q1 growth.
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Ora Banda Mining (ASX:OBM)declined 16.54% following its quarterly update outlining accelerated Davyhurst project development and an expanded credit facility.
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Brightstar Resources (ASX:BTR)fell 15.67%.
On The Radar
Australian CPI and a heavy run of local earnings and AGMs land just as the US Fed meets on rates, so pricing for borrowing costs and the A$ is firmly in play.
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RBA Jones Speech, Sun 25 Oct. Any comment on how the board views recent inflation and labour data can shift expectations for the timing and size of future rate moves. This in turn affects bank funding costs and the A$.
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Australia Inflation Rate YoY, Wed 28 Oct. The September CPI print, with a previous reading of 4.0% and consensus at 4.2%, is central for rate expectations. A result meaningfully above 4.2% would increase pressure on borrowing costs and would likely support the currency.
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RBA Trimmed Mean CPI YoY, Wed 28 Oct. Core inflation was previously 3.6% with a 3.6% forecast, so a figure above that level would keep talk of tighter policy alive and would weigh most on rate sensitive growth stocks and housing exposed sectors.
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Fed Interest Rate Decision, Wed 28 Oct. The Federal Reserve is expected to hold at 4.0%. Any hint of future tightening risk would usually push the US dollar higher. This often takes some pressure off the A$ and feeds through to miners and exporters.
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Origin Energy, Fri 30 Oct. Q1 2027 results will put the focus on earnings from energy production and any commentary on pricing and contract revenue. These factors matter directly for how investors assess cash generation in the local energy sector.
Sector & Industry Watch
Materials: Miners slide as rate worries bite
Materials have given back ground over the past week, with the sector and the related Metals and Mining group both down on a 7 day and 30 day view. That pullback lines up with concern around global growth and rate settings, which feeds straight into how investors think about iron ore, copper and coal demand.
If your portfolio leans on resource stocks, the key near term signal is Australia's quarterly CPI and trimmed mean CPI. A hotter inflation read would keep rate pressure in focus and could keep funding and discount rate assumptions tight for big projects.
Real Estate: Listed property edging off recent lows
Real Estate has inched higher over the past week and month, yet remains well down over the year to date. The small bounce suggests investors are testing the idea that a lot of bad rate news is already reflected in prices, even while borrowing costs are still elevated for landlords.
If you hold A REITs for income, the crucial data point is Wednesday's Australia CPI and core CPI release. A softer than expected inflation result would take some pressure off future rate expectations, which matters directly for refinancing costs and potential distribution stability.
Financials and Banks: Rate sensitive rebound gathers pace
Financials have moved higher over the past week, and Banks have risen even more sharply over 7 days and 30 days while the 1 year picture is still softer. Markets are leaning toward the view that official rates stay restrictive for a while, which can support lending margins even as it keeps stress on some borrowers.
For anyone holding the big four, the most important trigger this week is the RBA trimmed mean CPI print alongside the headline CPI result. Those numbers shape expectations for future RBA meetings and can influence how investors weigh the trade off between stronger interest income and the risk of rising bad debts.
Consumer Staples: Defensive spending staying resilient
Consumer Staples continue to show strength, with the sector up over the past week and month and in positive territory year to date and over 1 year. That pattern points to households still prioritising groceries and everyday items even as mortgage repayments and rents absorb more of the budget.
If your portfolio relies on supermarkets and liquor stocks for stability, focus on how this week's Australia CPI breaks down by food and household categories. Sticky price growth in essentials can support revenue in dollar terms, although it also tests how far shoppers can absorb higher tickets before trading down.
Energy: Oil and gas pause after strong year
Energy and the Oil and Gas industry have eased over the past week and month, even though returns over the year to date and past 12 months remain firmly positive. The recent drift reflects a mix of profit taking and concern about global demand, while Middle East supply risks keep Brent prices in the spotlight.
If you own producers or infrastructure plays, keep an eye on the upcoming EIA and API crude inventory data in the US alongside headlines around Middle East supply. Those indicators help set the tone for global oil pricing, which in turn feeds into earnings expectations for Australian Energy names.
Don't Wait For The Winners, Find Them
If sticky inflation and rate pressure are your focus this week, start by stress testing your income holdings against this list of 6 dividend fortresses .
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