Investors await Australian central bank rate decision

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We see the RBA lifting rates by 25bp to 0.60%. The RBA’s guidance for rates in May set up a string of ‘business as usual’ 25bp rises in our view…

Tapas Strickland

economist, National Australia Bank

Over in South Korea, the Kospi fell 1.17%. Australia’s S&P/ASX 200 declined 0.89%.

The Nikkei 225 in Japan hovered fractionally higher, while the Topix index climbed 0.49%.

MSCI’s broadest index of Asia-Pacific stocks outside Japan traded 1% lower.

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The Reserve Bank of Australia is expected to announce its latest interest rate decision at 12:30 a.m. HK/SIN on Tuesday.

“We see the RBA lifting rates by 25bp to 0.60%. The RBA’s guidance for rates in May set up a string of ‘business as usual’ 25bp rises in our view, and there has been nothing in the data flow since May to wrest them from the outlook painted at that time,” Tapas Strickland, an economist at National Australia Bank, wrote in a note.

Overnight on Wall Street, the S&P 500 climbed 0.31% to 4,121.43. The Dow Jones Industrial Average edged 16.08 points higher, or less than 0.1%, to 32,915.78. The tech-heavy Nasdaq Composite rose 0.4% to 12,061.37.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 102.629 after a recent bounce from below 102.

The Japanese yen traded at 132.72 per dollar, still weaker than levels below 128 seen against the greenback last week. The Australian dollar changed hands at $0.7164, off levels above $0.72 seen yesterday.

Oil prices were higher in the morning of Asia trading hours, with international benchmark Brent crude futures up 0.52% to $120.13 per barrel. U.S. crude futures climbed 0.53% to $119.13 per barrel.

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