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Asian markets mixed as Australia’s central bank holds rates steady

Australia’s central bank kept interest rates unchanged on Tuesday following a surprise hike last month. Like most other central banks around the world, the pause came with a warning that it will tighten policy as needed to tame inflation. Investors were digesting the move and what it means for other central banks’ hiking cycles on Tuesday with Asian markets trading mixed early in the session.

Shane Strowmatt, LGT
Tempo di lettura
5 minuto
Reserve Bank of Australia
© Shutterstock

Australia’s S&P/ASX 200 was trading up 0.5% following the Reserve Bank of Australia’s announcement that it will keep its cash rate unchanged an 11-year high of 4.1%. Japan’s Nikkei 225 was down 0.9% and South Korea’s Kospi lost 0.2%. In China, stocks were doing better with Hong Kong’s Hang Seng Index gaining 0.46% and the Shanghai Composite trading essentially flat.

Oil prices were trading higher on Monday after Saudi Arabia and Russia both cut their oil output plans for the coming month. Saudi Arabia is extending cuts of one million barrels per day through at least August while Russia will cut by 500,000 barrels per day during the month.

Factory activity around the globe was generally disappointing in June, data released Monday showed. Purchasing Managers’ Indices in Europe were contracting at a faster pace than investors had expected while also weakening in China, Japan and South Korea. In the US, Manufacuring PMI slumped to 46.0 in June from 46.9 in May, levels last seen directly after the outbreak of the coronavirus.

In New York, stock markets could not keep up with the pace of gains made last week but traded somewhat higher on Monday. The Dow Jones Industrial close up 0.03% at 34,418.47 points. The S&P 500 finished 0.12% higher at 4,455.59 points. The Nasdaq-100 gained 0.19% to finish the session at 15,208.69 points. US markets closed early on Monday and will remain closed on Tuesday for the Independence Day holiday.

In individual stocks, Tesla shares were boosted by strong quarterly delivery figures on Monday. Shares were up 6.9% after the company said it sold more than 466,000 vehicles in the second quarter of the year. The electric vehicle manufacturer has been slashing prices in an effort to increase volumes.

In Europe, consumer prices in Switzerland were on the rise in June, up 0.1% compared with the previous month. The inflation rate did decelerate, however, up 1.7% year-on-year in June after gaining 2.2% in May. That rate is much lower than in neighbouring European countries, such as Germany, where data released Friday showed the inflation rate increasing to 6.8% in June.

Corporate news in focus: There is no major corporate news scheduled.

Economic data in focus: German trade balance (08:00 CET).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.