The Reserve Bank of Australia holds its cash rate steady at 3.6%, in line with expectations. The cautious stance reflects concern over rising headline CPI inflation. As it stands, we think the probability of a rate cut at the November meeting has meaningfully diminished. The Aussie dollar remains supported
Chair Powell could have been super balanced, or even hawkish. But he effectively chose to endorse the market discount for a rate-cutting phase ahead. It's had quite the reaction. Risk assets are up, the dollar down, so's the front-end yield. Watch longer tenor yields though - the deep thinkers of the bond market, and not quite convinced cuts are all good
Japan's Nikkei index hit a new milestone on Wednesday, crossing the 43,000 mark for the first time ever. The broader Topix index also reached a record high, following strong gains in Wall Street overnight and marking six straight days of growth.
President Trump’s so-called “Liberation Day” has arrived and an announcement is scheduled for the Rosa Garden at 4pm Washington time when all will be revealed in terms of the tariff actions against the US’s trading partners.
Risk assets were down again on Monday in the run-up to what Trump has dubbed Liberation Day on 2 April, when he is due to announce a raft of reciprocal customs tariffs, which would see the trade war take on a global dimension.
It has been a quieter trading session overnight after the risk-off start to the week. The Nikkei 225 index is unchanged after yesterday’s sharp 4.1% sell-off. Similarly, the major foreign exchange rates have been relatively stable overnight ahead of the release tomorrow of President Trump’s plans for “reciprocal tariffs”.
The major FX rates have remained relatively stable at the start of this week in contrast to the deepening sell-off in the equity markets. One of the biggest movers yesterday was the Nasdaq composite index which fell sharply by 4.0% and extended its decline since the high in December to almost 14%.
