Investment update - August 2025
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Published on 29 Sept 2025August saw continued volatility in global markets as investors weighed softer data against monetary policy signals. Equity markets were mostly positive, with the US S&P 500 up 1.9%, Japan’s Nikkei 225 jumping 4.0% and Australia’s ASX 300 lifting 3.2%, while emerging markets slipped 0.4%. Fixed income also improved.
In the US, jobs growth slowed with non-farm payrolls up just 22,000, unemployment edged higher to 4.3% and GDP was revised to 3.3%. Inflation stayed at 3.1% and the Federal Reserve held rates at 4.5% despite political pressure.
In Australia, the RBA cut rates to 3.6% after weak consumer sentiment and labour data. GDP grew 0.6% in Q2, above expectations, and sentiment lifted to 98.5, suggesting early signs of recovery. However, building approvals fell 8.2% in July, leaving the country short of housing targets and adding to affordability pressures.
The Eurozone economy showed tentative signs of stabilisation, with modest GDP growth, alongside improving manufacturing and retail activity. However, inflation slightly above the ECB’s target remains a concern. The UK economy weakened, marked by sluggish growth and low investment leading to a rate cut to 4.0%, despite persistent inflation. Japan’s economy expanded, driven by domestic demand and rising wages, although trade tensions and policy uncertainty weighed on the outlook. China’s economy remains a mixed picture, with weak domestic demand and deflationary pressures offset by stronger exports and improving credit conditions.