Finance News · Sunday, 27 September 2026

01 Briefing what happened

Australia is expected to raise its rate to 4.6% on Tuesday, even with house prices falling and joblessness at a five-year high

Australia's central bank looks set to raise borrowing costs for a fourth time this year, because the things pushing prices up barely respond to interest rates. Also today: Trump turns down Iran's offer to reopen Hormuz, and the US faces a week of price and jobs reports.

4.35% to 4.6%

Australia's main interest rate now, and where it is expected to go on Tuesday

4.6% would be the highest in 15 years [1]

fall in Australian house prices from their peak

many economists now expect 10%, the biggest fall in three decades [1]

4.6%

of Australia's workforce without a job in August

the most since late 2021 [3]

3.6%

underlying yearly price rises in Australia

Australia's central bank aims for 2% to 3% [2]

The lead story — what happened

Australia's central bank, the Reserve Bank of Australia, meets on Tuesday 29 September and is expected to raise its main interest rate from 4.35% to 4.6%. [1][4]
That would be its fourth rise this year and the highest rate in 15 years. [1]
For decades the bank cut rates whenever Australian house prices fell. This time prices are falling and it is raising them. [1]
House prices are down nearly 4% from their peak. A government tax change on homes bought to rent out has also cut lending to landlords. [1]
More economists now expect a 10% fall, the biggest in three decades. HSBC, a big British bank, says 13% if rates rise twice more. [1]
The bank's governor, Michele Bullock, said on 22 September that unemployment of 4.5% to 5% could help bring prices under control. [2][6]
Unemployment rose to 4.6% in August, the highest since late 2021. Employment still grew by 39,500, all of it in part-time jobs. [3]
Prices are still rising too fast. Underlying inflation, which leaves out the jumpiest prices, is 3.6%, above the bank's 2% to 3% target. [2][3]
Australia burns more diesel per person than any other rich country, so costly fuel pushes its prices up hard. [6]
Lachlan Dynan of Deutsche Bank, a big German bank, says most of this year's growth comes from data centres, government spending and immigration. None of these responds much to interest rates, so housing takes the squeeze. [1]
Traders expect more. They already bet on a rate of 4.85% and see a 70% chance of 5.1%. [1]
Australian shares fell to their lowest since 12 June on 24 September, with the four big banks down about 2%. The Australian dollar hit a seven-week low. [5][3]

Fall so far4%

Many economists' forecast10%

HSBC, if two more rises13%

How far Australian house prices have fallen from their peak, and two forecasts of how far they could fall.

Who is involved

Michele Bullock

governor of the Reserve Bank of Australia, the country's central bank; says unemployment of 4.5% to 5% could help slow prices
Sarah Hunter

an assistant governor at the same bank; says house prices would need to stay 10% lower to cut spending much
Lachlan Dynan

a strategist at Deutsche Bank, a big German bank; says housing has to take the squeeze that data centres and government spending will not
Luke Yeaman

chief economist at the Commonwealth Bank of Australia, a big Australian lender; expects a rise and little relief for households

How it unfolded

Since Feb Three rises take the rate from 3.6% to 4.35% [2]
August The bank holds and names the Iran war and the data-centre boom as risks [1]
22 Sept Bullock says unemployment of 4.5% to 5% could help [2]
24 Sept Unemployment reaches 4.6% and shares fall to a three-month low [3][5]
29 Sept Decision day, with a rise to 4.6% expected [1]

Where this points

Watch what the bank says on Tuesday, not only the rate. Talk of more rises would match the 4.85% traders expect, and a hold would show falling house prices have started to count. [1]

What is pushing on the whole day

The bar and the word are our reading of how hard each one is pushing today. The arrow is where it is heading. The evidence is in the stories below.

Borrowing getting dearer High↑

Australia's central bank is expected to lift its rate to 4.6% on Tuesday. [1] US traders put the chance of another US rate rise in October at 64%. [10] US companies sold about $33 billion of bonds this week, short of the $40 billion expected. [13]

Oil above $100 High→

Oil above $100 a barrel is keeping Australian prices high. [3] US President Donald Trump turned down Iran's offer to reopen the Strait of Hormuz, the sea lane out of the Gulf. [14] High petrol prices are squeezing US household budgets. [8]

Data centres keep building Building↑

Deutsche Bank says Australia's data-centre boom hardly responds to interest rates. [1] In the US, AI companies keep investing through higher rates. [11] Oracle, a US software and cloud company, warned a data-centre developer that power could be late. [20]

Government budgets under strain Building→

Moody's, a firm that grades how safe it is to lend to a borrower, cut Botswana's rating as its diamond income fell. [25] The Czech government plans a third year of wider deficits. [22] Trump moved to hold back $800 million the US Congress had approved. [17]

The rest of the day

17 more stories on this beat.

Each with its own sources. None of these is a link to the story above.

02
Trump turns down Iran's Hormuz offer

US President Donald Trump said on Saturday that he had rejected Iran's offer to reopen the Strait of Hormuz, the narrow sea lane out of the Gulf, and end the fighting. [14] Iran had offered a seven-day ceasefire if the US lifted its naval blockade, unfroze Iranian money and ended sanctions on its oil. [15] Oil prices had eased on Friday on hopes of a truce. [10] About 13.5 million barrels a day now get through with US military help, one oil analyst estimates, still below pre-war levels. [15]

Why it matters — The Wall Street Journal reported that Trump expects to resume bombing Iran after the US midterm elections in November. [14] The war began on 28 February, and it has pushed up fuel costs in importing countries such as Australia. [14][5]
03
A week of US price and jobs tests

Three big US reports land this week. [7][8] On Tuesday the Conference Board, a business research group, publishes consumer confidence, which fell to a seven-month low in August. [8] On Wednesday comes the PCE index, a price measure the US central bank follows closely; its core reading was 3.3% a year in July. [7] On Friday the September jobs report is expected to show 100,000 new jobs and 4.2% unemployment. [7] The euro area also reports inflation, and China a survey of its factories. [9]

Consumer confidenceTuesday
PCE pricesWednesday
Jobs reportFriday
The three US reports this week, in the order they arrive.

Why it matters — Traders put the chance of another US rate rise in October at 64%, up from 55% a week earlier. [10] A very strong jobs number would firm up the case for that rise, one fund manager said. [7]
04
Companies borrow less as bond jitters rise

A measure of how wildly US bond prices are expected to swing has jumped, and in the past such jumps came before trouble for company debt. [13] US companies sold about $33 billion of bonds this week, short of the roughly $40 billion that dealers forecast. [13] Some borrowers paid buyers extra, and at least one pulled its sale. [13] The US government's 10-year borrowing rate is now above 5%. [13]

$40bnDealers' forecast
$33bnBonds actually sold
US company bond sales this week, against what dealers expected.

Why it matters — Companies that borrowed at 3% or 4% now face nearly double that when their debt comes due, a fund manager at Federated Hermes said. [13] Strategists expect the weakest-rated companies, and those funded by private lenders, to struggle first. [13]
05
US and China agree a $30bn tariff cut

China and the US agreed a $30 billion arrangement to lower tariffs, the taxes on imports, on both sides, Xinhua, China's state news agency, reported on Saturday. [16] It was one of eight points agreed during Chinese President Xi Jinping's visit to the US, which also started talks on artificial intelligence. [16] Earlier in the week the two governments extended their trade truce to 10 January. [32] Officials also plan to meet in Shenzhen, China, in about two months on AI safety. [31]

Why it matters — Neither side has published which goods the tariff cut covers, so it is not yet clear which companies will pay less. [16] The truce extension was shorter than investors had expected. [32]
06
Trump moves to hold back $800m

Trump moved on Friday to withhold more than $800 million that the US Congress had approved for programmes on immigration, race and education. [17] They include help for refugees, support for businesses owned by racial minorities and conservation abroad. [17] He used a pocket rescission, a rarely used move that goes around Congress. [17] Susan Collins, the Republican senator who chairs the committee that sets spending, called it illegal. [17]

Why it matters — The US Constitution gives Congress the power over spending. [17] Last year the US Supreme Court declined to stop the same move on $4.9 billion of foreign aid while the legal fight went on. [17]
07
US central bankers split on job losses

Officials at the US central bank, which raised rates this month for the first time since 2023, hope to slow prices without costing many jobs. [10][12] Their bet is that businesses will raise prices less if they believe the bank is serious. [12] Austan Goolsbee, who runs the bank's Chicago branch, said the only way to close the gap is to cut spending, and with it output and jobs. [12] So far the US economy keeps growing through higher rates, helped by AI investment. [11]

Why it matters — If Goolsbee is right, lower inflation will cost some workers their jobs or hours. [12] Friday's jobs report will show whether US hiring is holding up. [7]
08
Jury finds Facebook misled New Mexico users

A jury in New Mexico, a US state, found on Friday that Facebook misled users about how it protected their data. [18] It counted more than 43 million breaches of the state's consumer law. [18] The case was about Cambridge Analytica, a political consulting firm that got data from about 87 million profiles through a personality quiz. [18] A judge will set the penalty at a hearing on 1 October, and the state is asking for $5,000 per breach. [18]

Why it matters — At the full rate the penalty would pass $200 billion, and the state says any money won will go to its education fund. [18] Meta, which owns Facebook, says it disagrees and will keep fighting. [18]
09
Oracle bosses' $988m options now worth nothing

Oracle, a US software and cloud company, gave founder Larry Ellison and its two co-chief executives share options valued at $988 million when granted. [19] An option is the right to buy shares later at a price fixed when it is given. It pays only if the shares climb above that level. [19] Oracle's shares closed on Friday at $137, down 53% in a year and far below the set prices of $280 and $308. [19] This week they also fell about 3% after Oracle warned a data-centre developer that power could be delayed. [20]
0160320
1. 1Shares on Friday, $137137
2. 2Ellison's options, $280280
3. 3Co-chiefs' options, $308308
Oracle's share price against the prices at which its bosses' options start to pay.
Why it matters — Oracle says options that pay nothing when shares fall show its pay plan working as meant. [19] Most options held by its staff are also worth nothing for now, and median pay fell to $94,740. [19]
10
Immigration raids shut Kansas meat plants

Cattle groups in Texas, Kansas and Oklahoma said on Friday that US immigration operations have kept workers away from meat plants and feedlots, where cattle are fattened. [21] Thousands of cattle shipments were delayed, costing millions of dollars. [21] Some plants in the Kansas towns of Dodge City, Liberal and Garden City shut for a time and sent cattle back to the feedlots. [21] The US homeland security department said it was not raiding workplaces. [21]

Why it matters — The groups warn that the disruption could raise meat prices for shoppers. [21] The operations are in states that voted heavily for Trump, and even Republican lawmakers are speaking out. [21]
11
Czech Republic moves closer to an upgrade

S&P, one of the firms that grade how safe it is to lend to a government, raised its outlook for the Czech Republic to positive on Friday. [22] That means an upgrade is possible within one to two years; the last one came in August 2011. [22][23] S&P said Czech income per person, counted in dollars, has risen about 40% in five years. [23] It kept the rating itself at AA-. [22]

Why it matters — The Czech government of Prime Minister Andrej Babis plans a third straight year of wider deficits to pay for wages, roads, health and defence. [22] S&P expects deficits to average 3% of the economy through 2029, partly for a 500 billion koruna nuclear power plan. [23]
12
Moody's raises Montenegro's grade

Moody's raised Montenegro's credit rating one step, to Ba2, and said further rises are likely. [24] It credited reforms tied to the small Balkan country's bid to join the European Union, which have moved faster than expected. [24] Money the EU gives countries preparing to join also steadies its finances. [24] Elections are due in June 2027. [24]

Why it matters — Montenegro still depends heavily on tourism, and in 2025 it bought from abroad far more than it sold, a gap equal to 20.6% of its economy. [24] Moody's said backsliding on reforms could reverse the move. [24]
13
Botswana's grade cut as diamond money falls

Moody's cut Botswana's credit rating one step, to Baa2, because lower diamond income and steady budget deficits keep adding to its debt. [25] It expects government debt to reach 41% of a year's economic output by 2027, up from 31% in 2025. [25] Interest will take 5.9% of government revenue by then. [25] Moody's also set the outlook to stable, meaning no further cut is signalled for now. [25]

202531%
2027, Moody's forecast41%
Botswana's government debt as a share of a year's economic output.

Why it matters — Diamonds sit at the core of Botswana's public finances, so a weaker diamond market reaches its budget directly. [25] It still holds foreign currency worth about six months of imports. [25]
14
Fiji keeps its grade as debt climbs

Moody's kept Fiji's credit rating at B1 with a stable outlook. [26] It expects the Pacific country's deficit to widen to about 6% of its economy in its 2027 budget year, pushing debt towards 84% and then about 90% by 2030. [26] Spending before the February 2027 election and help with energy prices are part of the reason. [26] About two-thirds of Fiji's debt is owed to lenders at home, mostly its national pension fund. [26]

Why it matters — Borrowing mostly from its own savers, and cheaply from development lenders abroad, keeps Fiji's interest bill easier to carry. [26]
15
Two indebted US firms get better grades

Moody's raised StubHub, a website for reselling event tickets, to B2 after it repaid $350 million of debt early since late 2025, and another $100 million after its second quarter. [27] It expects StubHub's debt to fall from 8.5 to 5.7 times a year's earnings by the end of 2026. [27] Moody's also raised AMC Entertainment, the cinema chain, to B3 from Caa2. [28] AMC plans to swap about $3.7 billion of debt for new loans that run longer and could cost about 9% instead of about 11%. [28]

11%AMC's old debt
9%AMC's new debt
The interest AMC pays on its debt now, and after the planned swap.

Why it matters — The swap gives AMC about six years before its debts fall due on average, instead of three. [28] More people went to its cinemas: attendance rose 14% in the first half of 2026. [28]
16
US new-home sales beat forecasts

Sales of newly built single-family homes in the US ran at a yearly pace of 684,000 in the latest month. [29] Forecasters had expected 615,000, and the month before was 643,000. [29] The figure counts brand-new houses only; sales of existing homes are reported separately. [29]

Why it matters — Strong home sales add to signs that the US economy is not slowing much despite higher borrowing costs. [11][29] Upbeat US figures have already pushed up bets on another US rate rise. [10]
17
China lets the yuan rise, then slows it

China's yuan reached its strongest against the US dollar since early 2023 on 22 September. [31] China's central bank had set a stronger daily reference rate, the level trading moves around, for ten sessions in a row. [31] Two days later the yuan slipped after the bank set a weaker reference rate than expected and the dollar rose on bets of higher US rates. [32] The yuan is still up about 4.4% this year. [31]

Why it matters — The yuan's rise had already reflected hopes of better US-China relations, a Chinese brokerage said. [32] Its moves also help steer other Asian currencies. [31]
18
Tokyo and Europe end the week higher

Japan's Nikkei 225 share index rose 1.23% on Friday, led by chip and AI companies. [20] Investors also bought before Monday's deadline to qualify for mid-year dividends, and bank shares rose 3.23%. [20] Japan's 40-year government borrowing rate climbed to 4.255% that morning, after US rates rose. [33] In Europe, the STOXX 600 index of big European companies gained for the week as oil prices eased. [30]

Why it matters — Energy costs still weighed on German shoppers' mood heading into October. [30] Higher US rates and a stronger dollar are adding to talk of more rate rises from the Bank of Japan. [33]

02 Lesson why it matters

When most spending ignores rates, home buyers take more of the rise

A rate rise slows the economy through people who borrow, so when data centres and governments keep spending anyway, housing has to shrink more.

The twist

A central bank sets one interest rate for the whole country. When much of the spending does not change with that rate, the spending that does, like buying a home, has to fall further to slow everything down.

The picture

Data centresKeep building

Home buyersPull back

Two kinds of spending under the same expected 4.6% rate in Australia. Data-centre building barely reacts to it, and home buying does.

How it works

Prices rise faster than a central bank wants
It raises its interest rate to cool spending
A higher rate slows spending paid for with loans, like buying a home
Data centres, government budgets and new arrivals keep spending anyway
So home buying has to fall further to slow the whole economy

The same force, elsewhere today

Where this chain is also running, in today's other stories.

A week of US price and jobs tests

An AI building boom has kept the US economy growing through its first rate rise, so traders now expect a second one.
Companies borrow less as bond jitters rise

The squeeze lands on companies that must borrow again soon, because debt taken at 3% or 4% now costs nearly double to replace.
US central bankers split on job losses

Goolsbee says a rate rise works only by cutting spending, and with it jobs, so some part of the economy has to take the hit.

Where you've seen this

A school's budget

when salaries and rent cannot be cut, every saving comes out of trips and books

A road toll

a higher toll only slows the drivers who can switch roads, so it has to rise further to cut traffic

Office cost-cutting

long contracts cannot be touched, so travel and training take the cut

The catch

This holds only while data-centre builders and governments keep spending at higher rates. If the cost starts to bite them too, they slow down, and housing carries less of the load.

And the whole of it

A family in Sydney paying off a home, a worker hoping for a pay rise, a company renewing its loans and a data-centre builder all live under the same rate. Each of them sees their own bill, and none of them can see how much of the country's slowdown was pushed onto them.

03 Truth what's really going on

What is really going on

Australia's central bank is expected to raise rates for a fourth time this year to slow prices pushed up by the Iran war and a data-centre boom. [1] A Deutsche Bank strategist says neither of those responds much to interest rates. [1] So the slowdown lands on the people and companies that borrow: Australian house prices are down nearly 4%, and US companies are selling fewer bonds as borrowing costs climb. [1][13]

Why it works on us — A report that an economy is powering through higher rates sounds like good news for everyone, because one figure for a whole country hides which households and firms are paying for it. [11]

Who gains

Buyers of new US government bonds — The 30-year bond has paid as much as 5.53%, the most since 2004, so new lenders lock in the highest income in over 20 years. [10]
Gulf oil exporters such as Saudi Arabia — With US warships guiding tankers through Hormuz in daylight, Saudi Arabia has moved its oil shipments back into the Gulf. [15]
Australian oil and gas companies — Woodside Energy and Santos rose 1.2% and 1.4% while most of the market fell, lifted by dearer oil. [5]
New Mexico's schools — The state says any money won from Facebook will go into its education fund. [18]
StubHub's lenders — The company repaid debt early out of spare cash, and Moody's now rates what it owes as safer. [27]

Who pays

Australian home owners — Their homes are worth nearly 4% less than at the peak, and borrowing is expected to get dearer again on Tuesday. [1]
Australian job seekers — Australia's central bank governor said unemployment of 4.5% to 5% could help slow prices, and it is already 4.6%. [2][3]
US companies that must borrow again — Debt taken at 3% or 4% now costs nearly double to replace, a fund manager at Federated Hermes said. [13]
Meat plants and cattle feeders in Kansas, Texas and Oklahoma — Workers stayed away during immigration operations, and delayed cattle shipments cost millions of dollars. [21]
Botswana's government — Lower diamond income is pushing its debt up, and interest will take 5.9% of its revenue by 2027. [25]
Oracle's staff — Most options held across the company are worth nothing at today's share price, and median pay fell to $94,740. [19]

What nobody knows yet

Open questions from across today’s stories — ours included.

01

Whether Australia's central bank raises its rate on Tuesday.

Reuters reported markets putting the odds at 95%, while a rate tracker quoted by Investing.com put them at 86%. [3][4] Nothing is settled until the board decides.
02

How far Australian house prices will fall.

Many economists now expect 10%, and HSBC says 13% if rates rise twice more; both are forecasts. [1] An assistant governor said only a lasting 10% fall would cut household spending much. [1]
03

Whether the US resumes bombing Iran after the November midterm elections.

The Wall Street Journal reported it from unnamed officials, and Trump has not said so in public. [14][15]
04

What the $30 billion US-China tariff deal actually covers.

It is known only from Xinhua's summary of an eight-point list, and neither government has published the goods or the tariff rates. [16]
05

Whether Trump's $800 million hold-back is legal.

Senator Susan Collins calls it illegal, but the US Supreme Court let the same move go ahead last year while the case went on. [17]
06

How much Meta will pay in New Mexico.

A judge sets the penalty on 1 October; the state wants $5,000 for each of 43 million breaches, and Meta says it will keep fighting. [18]
07

When Oracle's New Mexico data centre gets its power.

Oracle warned the developer that power could be delayed but no date was given, according to a report. [20]
08

How many people US immigration officers arrested in Kansas.

The homeland security department confirmed its officers were there but gave no count. [21]
09

How strong Friday's US jobs report will be.

Economists polled by Reuters expect 100,000 new jobs, while AP notes that wage growth has been slowing. [7][8]

04 Hope carry this

About 13.5 million barrels of oil a day are now getting out of the Gulf through the Strait of Hormuz, with the US military guiding tankers through in daylight. That matches the brief peak in July.

Also true today

Moody's raised Montenegro's credit rating after the country's reforms to join the European Union moved faster than expected.
Czech income per person, counted in dollars, has risen about 40% in five years, and S&P now says the country's rating may go up for the first time since 2011.
StubHub, the ticket-resale website, repaid $450 million of its debt early out of spare cash, and Moody's raised its rating.