Asian stocks followed Wall Street's upward trend on Tuesday, with investors anticipating speeches from multiple Federal Reserve officials later in the day. The Australian dollar remained stable as domestic shares climbed ahead of the country's interest rate decision.
Reduced concerns over political instability in Europe contributed to the positive market sentiment, pushing EUROSTOXX 50 futures up by 0.6%, recovering some of last week's significant losses. Similarly, FTSE futures increased by 0.43%.
In Asian trading hours, the spotlight was on the Reserve Bank of Australia's (RBA) policy decision, where the expectation is for the central bank to maintain the current interest rates.
The focus, however, will be on any indications of a potential easing cycle in the future.
The Australian dollar was last up 0.07% at $0.6617, while Australian shares rose by 0.9%, keeping pace with other regional markets.
"Key domestic data and events since the May meeting have been mixed but lean slightly towards strength in our view - a solid April CPI print, further house price gains, resilient household consumption, a still tight labor market, and expansionary budgets," he said.
"Things are still a long way from prompting the RBA to signal a shift to a less restrictive policy stance."
Elsewhere, MSCI's broadest index of Asia-Pacific shares outside Japan rose by 0.68%, bolstered by an overnight rally on Wall Street.
"Optimism over a resilient economy, improving corporate earnings, and the potential start of rate cuts has supported equities, defying concerns that the rally has been concentrated in just a few mega-cap tech stocks," said Jameson Coombs, an economist at Westpac.
Japan's Nikkei gained 0.83%, while Hong Kong's Hang Seng Index inched up by 0.14%. Chinese blue-chips also saw a modest increase of 0.17%.
This week, central banks in Norway, the UK, and Switzerland are set to meet. The expectations are for Norway and the UK to hold rates steady, while the Swiss National Bank is anticipated to deliver another 25 basis points (bps) of easing.
In the United States, at least six Fed speakers are scheduled for Tuesday, potentially offering further insights into the U.S. interest rate outlook following last week's policy decision.
Futures markets now suggest approximately 45 bps of Fed cuts are expected for the rest of 2024.
In currency markets, the dollar showed mixed performance on Tuesday, falling slightly by 0.04% to 157.68 yen.
The euro dipped slightly to $1.0729, while the British pound rose by 0.04% to $1.27105.
China's onshore yuan hovered near a seven-month low at 7.2554 per dollar, pressured by mixed economic data from Monday that indicated a need for additional support from Beijing to bolster the economy.
"China's May economic data suggest that policymakers have a lot to do to sustain the fragile recovery," said analysts at Societe Generale. "The supply side and external demand remained more robust than domestic demand, despite the moderation in industrial production growth."
Elsewhere, oil prices rose on a stronger demand outlook and investor confidence that OPEC+ producers could pause or reverse plans to increase supplies from the fourth quarter of this year.
Brent crude futures were up 0.11% at $84.34 per barrel, while U.S. West Texas Intermediate crude futures steadied at $80.34 a barrel.
Spot gold edged up 0.13% to $2,321.99 an ounce.
Paraphrasing text from "Reuters" all rights reserved by the original author.
