During the quarter, global equity markets experienced solid gains, supported by positive investor sentiment and ongoing optimism around technological innovation.
Central banks, including the US Federal Reserve and the Reserve Bank of New Zealand, played a stabilising role by maintaining or signalling supportive monetary policies amidst muted economic activity and evolving inflation dynamics. Despite periods of volatility, equity markets demonstrated resilience, buoyed by strong corporate earnings and the continued strength of major technology companies. Overall, market confidence was underpinned by expectations of accommodative policy actions and optimism about future growth.
Global Markets Overview
Global economic growth in the third quarter was marked by significant regional differences, with the United States leading in robust expansion while the Euro area lagged due to contractions in major economies. Equity markets worldwide posted solid gains, supported by improved trade policies and fiscal measures.
The US economy stood out, as stock indices reached record highs driven by major trade agreements, expansive tax and spending initiatives, and strong performance in technology stocks—particularly after renewed semiconductor exports to China. Despite this, economic indicators suggest the economy is slowing, with weak housing market data and reduced consumer spending. However, the Federal Reserve’s readiness to adjust interest rates further boosted investor confidence and underscored the central bank’s responsive stance to labour market and inflation trends.
Meanwhile, emerging markets such as Taiwan, China, and Korea outperformed developed peers, reflecting overall optimism. Despite persistent inflation concerns, especially in services, and ongoing geopolitical risks, equity markets remained resilient, with modest gains in small-cap and technology sectors. Investors also sought safety in gold amid global uncertainties, while oil prices fluctuated within a narrow range due to variable demand and supply.
Australasian Markets Overview
Australasian equity markets generally tracked the positive momentum seen globally, achieving modest gains despite persistent economic challenges. Australian shares advanced steadily, supported by resilient commodity prices and strong demand from key Asian partners. However, subdued economic activity, cost-of-living pressures, and mixed signals from the housing sector weighed on domestic sentiment. Investors also remained attentive to both local monetary policy and evolving global developments, which continued to shape market outlooks.
In New Zealand, the share market made measured progress, aided by stable interest rates and persistent expectations of potential future rate cuts in response to sluggish growth. Defensive sectors like utilities and consumer staples outperformed amid uncertainty about the speed of recovery. Gains continued across the quarter for New Zealand equities, although they lagged behind global counterparts. Trade policy shifts became a key focus as the U.S. raised tariffs on New Zealand exports from 10% to 15%, impacting sectors such as beef, dairy, and wine with an estimated annual cost of NZ$450 million. Despite these challenges, local equities benefitted from the Reserve Bank of New Zealand’s 25 basis point reduction in the Official Cash Rate to 3%, which provided additional market support.
Overall, the quarter was marked by modest equity gains, resilience in the face of global and domestic uncertainty, and a cautious but hopeful outlook for continued economic improvement.
Outlook
The first nine months of the year have flown by, and it’s been a ride for investors who managed to tune out the noise and stay the course. Even with a few ups and downs, global markets have shown real strength. After a rocky patch in April, equities bounced back and are now sitting comfortably above where they started the year.
Lately, there’s been a sense of optimism, mixed with the need to be considered. The global economy is holding up well, companies are doing better than expected, amidst a backdrop in which trade tensions seek resolution.
The Federal Reserve has also stepped in and cut interest rates, which could be a positive sign for markets. Every cycle is unique however historically, when rates start to come down and the economy stays steady, things tend to go well for investors.
Closer to home, New Zealand is gearing up for an interesting few months. The Reserve Bank’s recent rate cut means lower mortgage rates, which could give people a bit more confidence and encourage spending as we approach the holiday season.
With global growth holding up, companies performing well, and a bit of seasonal momentum, the outlook for investors feels constructive. If things continue as they have historically with the December quarter repeatedly being the strongest, there’s a good chance the year could end on a positive note.
20 October 2025
Economic Commentary: Quarter End 30 September 2025
During the quarter, global equity markets experienced solid gains, supported by positive investor sentiment and ongoing optimism around technological innovation.
Central banks, including the US Federal Reserve and the Reserve Bank of New Zealand, played a stabilising role by maintaining or signalling supportive monetary policies amidst muted economic activity and evolving inflation dynamics. Despite periods of volatility, equity markets demonstrated resilience, buoyed by strong corporate earnings and the continued strength of major technology companies. Overall, market confidence was underpinned by expectations of accommodative policy actions and optimism about future growth.
Global Markets Overview
Global economic growth in the third quarter was marked by significant regional differences, with the United States leading in robust expansion while the Euro area lagged due to contractions in major economies. Equity markets worldwide posted solid gains, supported by improved trade policies and fiscal measures.
The US economy stood out, as stock indices reached record highs driven by major trade agreements, expansive tax and spending initiatives, and strong performance in technology stocks—particularly after renewed semiconductor exports to China. Despite this, economic indicators suggest the economy is slowing, with weak housing market data and reduced consumer spending. However, the Federal Reserve’s readiness to adjust interest rates further boosted investor confidence and underscored the central bank’s responsive stance to labour market and inflation trends.
Meanwhile, emerging markets such as Taiwan, China, and Korea outperformed developed peers, reflecting overall optimism. Despite persistent inflation concerns, especially in services, and ongoing geopolitical risks, equity markets remained resilient, with modest gains in small-cap and technology sectors. Investors also sought safety in gold amid global uncertainties, while oil prices fluctuated within a narrow range due to variable demand and supply.
Australasian Markets Overview
Australasian equity markets generally tracked the positive momentum seen globally, achieving modest gains despite persistent economic challenges. Australian shares advanced steadily, supported by resilient commodity prices and strong demand from key Asian partners. However, subdued economic activity, cost-of-living pressures, and mixed signals from the housing sector weighed on domestic sentiment. Investors also remained attentive to both local monetary policy and evolving global developments, which continued to shape market outlooks.
In New Zealand, the share market made measured progress, aided by stable interest rates and persistent expectations of potential future rate cuts in response to sluggish growth. Defensive sectors like utilities and consumer staples outperformed amid uncertainty about the speed of recovery. Gains continued across the quarter for New Zealand equities, although they lagged behind global counterparts. Trade policy shifts became a key focus as the U.S. raised tariffs on New Zealand exports from 10% to 15%, impacting sectors such as beef, dairy, and wine with an estimated annual cost of NZ$450 million. Despite these challenges, local equities benefitted from the Reserve Bank of New Zealand’s 25 basis point reduction in the Official Cash Rate to 3%, which provided additional market support.
Overall, the quarter was marked by modest equity gains, resilience in the face of global and domestic uncertainty, and a cautious but hopeful outlook for continued economic improvement.
Outlook
The first nine months of the year have flown by, and it’s been a ride for investors who managed to tune out the noise and stay the course. Even with a few ups and downs, global markets have shown real strength. After a rocky patch in April, equities bounced back and are now sitting comfortably above where they started the year.
Lately, there’s been a sense of optimism, mixed with the need to be considered. The global economy is holding up well, companies are doing better than expected, amidst a backdrop in which trade tensions seek resolution.
The Federal Reserve has also stepped in and cut interest rates, which could be a positive sign for markets. Every cycle is unique however historically, when rates start to come down and the economy stays steady, things tend to go well for investors.
Closer to home, New Zealand is gearing up for an interesting few months. The Reserve Bank’s recent rate cut means lower mortgage rates, which could give people a bit more confidence and encourage spending as we approach the holiday season.
With global growth holding up, companies performing well, and a bit of seasonal momentum, the outlook for investors feels constructive. If things continue as they have historically with the December quarter repeatedly being the strongest, there’s a good chance the year could end on a positive note.
20 October 2025