Equities Down 5%, Dollar Up 5%: What Australian Markets Did Between RBA Meetings

Aditi Sarkar

29 October 2026 09:03 PM AEDT

Equities Down 5%, Dollar Up 5%: What Australian Markets Did Between RBA Meetings

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Highlights

Australian equities fell around 5% between the September and November 2026 RBA Board meetings.
The AUD trade-weighted index rose approximately 5% since the start of 2026, standing at 65.3 on 28 October.
Brad Jones said US IT sector earnings expectations implied growth running at 45% per annum forever.
Jones also flagged market concentration in a handful of stocks at levels last seen in the 19th century.

Financial markets do not wait for central bank decisions. Between the September and November 2026 Board meetings, Australian equities fell around 5% while the Australian dollar trade-weighted index rose roughly 5%. RBA Assistant Governor Brad Jones used a speech at the AFR Super and Wealth Summit to flag what he described as stretched earnings expectations in AI-exposed markets.

Equity Market Moves

Between the September and November Board meetings, Australian equities fell around 5%. This decline occurred during a period in which the RBA's tightening cycle was continuing and global risk sentiment was being shaped by oil price rises, geopolitical developments, and concerns about AI-sector valuations.

The equity market move is one input into the RBA's broader assessment of financial conditions. A falling equity market tightens financial conditions for households and businesses with equity holdings, which adds to the restraint the Board's rate decisions are designed to produce.

Australian Dollar

The AUD trade-weighted index stood at 65.3 as at 28 October 2026, up approximately 5% since the start of the year. The AUD was trading at USD 0.7034, 111.03 Japanese yen, 0.6325 euros, and 4.69 Chinese yuan on that date.

A stronger currency provides some imported disinflationary pressure, as it lowers the cost of goods and services priced in foreign currencies. However, the RBA does not target the exchange rate and its movements are one factor among many in the inflation and economic outlook.

Brad Jones on AI Earnings and Financial Stability

Speaking on a panel at the AFR Super and Wealth Summit in Melbourne on 26 October 2026, RBA Assistant Governor (Financial System) Brad Jones said that US IT sector earnings expectations implied growth "running at about 45 per cent per annum forever." The panel was moderated by James Thompson of the AFR alongside three super fund executives. Jones also noted market concentration in a few stocks at a level last seen in the 19th century.

Jones flagged that AI debt financing is rising and taking more opaque forms, adding that operational risks are accelerating. The RBA's October 2026 Financial Stability Review described the Australian financial system as resilient while leaving room for continued caution, stating there is no room for complacency.

FAQs

Q: How did Australian equities perform between the September and November 2026 RBA meetings?

A: They fell approximately 5%.

Q: What was the AUD trade-weighted index on 28 October 2026?

A: 65.3, up around 5% since the start of 2026. Against the USD, the AUD was at 0.7034.

Q: What did Brad Jones say about AI earnings expectations?

A: Jones said US IT sector earnings expectations implied growth running at about 45% per annum forever, and flagged market concentration at levels last seen in the 19th century.

Q: What did the RBA's October 2026 Financial Stability Review say about the Australian financial system?

A: It described the system as resilient while also stating there is no room for complacency.

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