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    In January, the Australian S&P Global Composite PMI rose from 51 to 55.5.

    by VT Markets
    /
    Jan 23, 2026
    The Australian S&P Global Composite PMI rose from 51 to 55.5 in January. This increase indicates that the Australian economy is growing, meaning more business activity and greater confidence among companies. Both the manufacturing and services sectors are showing growth, suggesting that the economy is recovering.

    Strengthening Demand

    This trend points to rising demand and improved consumer confidence. Analysts will keep an eye on future economic data to evaluate the economy’s health and its effects on monetary policy. The jump in the January Composite PMI to 55.5 is a strong positive sign for the Australian economy. This robust data suggests that corporate earnings will likely exceed expectations in the coming months. We believe this presents an opportunity to buy call options on the ASX 200 index, anticipating an upward movement. This economic strength makes the outlook more complex for the Reserve Bank of Australia (RBA), which plans to maintain its cash rate at 4.35% through the second half of 2025. With last year’s quarterly inflation figures still around 3.5%, this PMI reading increases the chance of a more aggressive stance from the RBA. Therefore, we are considering strategies that benefit from rising yields, like buying puts on Australian 10-year bond futures.

    Market Expectations

    If the RBA adopts a more hawkish approach, the Australian dollar is likely to strengthen. The AUD has been trading in a narrow range against the US dollar, but this data could trigger a breakout. As a result, we are preparing for Aussie dollar strength by purchasing AUD/USD call options that expire in the next one to two months. We witnessed a similar trend in 2022 when strong economic data quickly changed market expectations, prompting the RBA to tighten its stance. The market reacted swiftly then, penalizing those who were slow to adapt. While this expansion is a good sign, it raises inflation concerns we thought were easing last year. Create your live VT Markets account and start trading now.

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