The Australian dollar remained steady after the Reserve Bank of Australia (RBA) decided to keep rates at 4.35%, as expected. The central bank warned against inflation risks and traders adjusted their expectations accordingly. Despite the lack of surprises in the RBA decision, the Aussie dollar held firm at $0.6612.
Market sentiment was further buoyed by the diminishing concerns over political turmoil in Europe. This positive outlook led EUROSTOXX 50 futures to rise by 0.35%, reversing previous losses. FTSE futures also climbed 0.25% in response to the improving market conditions.
The MSCI’s broadest index of Asia-Pacific shares outside Japan increased by 0.64%, reflecting the overall optimism in the market. Factors such as a resilient economy, improving corporate earnings, and the potential for rate cuts contributed to the positive sentiment among investors. While Nasdaq futures dipped by 0.07%, the S&P 500 futures saw a slight decrease of 0.02%.
Several central banks, including those of Norway, the UK, and Switzerland, are scheduled to meet this week. Expectations are for stability in rates for the former two, and a possible rate cut from the Swiss National Bank. Meanwhile, in the United States, Federal Reserve officials are set to speak and offer insights into the interest rate outlook following the recent policy decision.
The dollar advanced ahead of U.S. retail sales data, causing the euro to dip by 0.13% against the greenback. Similarly, the pound and yen both saw minor declines in value. China’s onshore yuan remained near a seven-month low, reflecting the ongoing need for economic support from Beijing to bolster the country’s economy.
Oil prices experienced a slight drop, with Brent crude futures slipping by 0.17% to $84.11 per barrel, and U.S. West Texas Intermediate crude futures falling to $80.19 a barrel. In contrast, spot gold prices rose by 0.08% to $2,320.69 an ounce, indicating a shift in investor preferences towards safer assets.