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Australian central bank holds rates, warns on inflation

The Reserve Bank of Australia’s (RBA) decision on Tuesday to leave interest rates unchanged while striking a distinctly hawkish tone on inflation kept pressure on Asia-Pacific equities, with Australia’s S&P/ASX 200 trading lower. The cautious mood ahead of Wednesday’s Federal Reserve interest-rate decision also weighed on Wall Street, where major US indices closed in negative territory on Monday, and contributed to softer sentiment in Asia. Chinese stocks underperformed after Beijing’s latest pledges of fiscal support were overshadowed by renewed competitive pressure on domestic chipmakers following the US move to allow Nvidia to sell more advanced AI chips in China. In Europe, Swiss equities outpaced their peers as an improvement in consumer confidence helped the Swiss Market Index finish Monday’s session higher. Gold prices were slightly weaker, trading around USD 4180 per ounce, while Bitcoin fell to around USD 89,900.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

Reserve Bank of Australia
© Shutterstock

The RBA kept its cash rate at 3.6% at its meeting on Tuesday, leaving borrowing costs unchanged for a fourth consecutive time after cutting by a total of 75 basis points earlier this year. Policymakers cited renewed upside risks to inflation as the main reason for the unanimous decision, noting that October consumer price data surprised on the upside and that core inflation remains above the 2% to 3% target range, while labour market conditions are only expected to cool modestly. The central bank reiterated it would do whatever is needed to secure price stability and full employment, but also highlighted resilience in private demand as consumption and investment have picked up amid lower rates and a trade deal with the US. The generally hawkish tone of the communication ahead of the Federal Reserve's (Fed) interest rate decision a day later put pressure on equities. Australia’s S&P/ASX 200 was down 0.5% on Tuesday, Korea’s Kospi was 0.3% lower and Japan’s Nikkei 225 bucked the regional trend, trading 0.1% higher.

Chinese chipmakers fall on Nvidia export move

Chinese indices fell as markets assessed Politburo pledges on Monday for stronger fiscal support and a likely 5% growth target for next year. Mainland China’s CSI 300 was trading 0.6% down, while Hong Kong’s Hang Seng Index lost 1.3%, pressured by losses in semiconductor stocks after US President Donald Trump allowed Nvidia to sell a more advanced AI chip in China. The move was seen as a setback for domestic Chinese rivals. Investors fear that access to Nvidia’s more advanced chips will dampen demand for Chinese-made AI processors and complicate Beijing’s drive for semiconductor self-sufficiency, despite Chinese authorities’ assurances that the use of foreign chips will remain tightly limited in critical sectors.

US equities ease ahead of Fed decision

US stock indices closed lower on Monday as investors adopted a cautious stance ahead of the Fed’s interest-rate decision, with the Dow Jones Industrial Average losing 0.5% to 47,739.32 points, the S&P 500 falling 0.4% to 6,846.51 points and the Nasdaq 100 slipping 0.3% to 25,627.95 points. Market participants are weighing the Fed’s dual mandate of price stability and full employment, with some economists seeing a rate cut as more likely given that inflation has so far remained below expectations despite Trump’s tariff policy. In macroeconomic policy, Trump unveiled a USD 12 billion support package for American farmers on Monday to offset the impact of his wide-ranging tariff measures, which have raised input costs and curbed export demand, particularly for soybeans.

Swiss consumer confidence improves slightly

Swiss consumer sentiment brightened somewhat in November, with the index calculated by the State Secretariat for Economic Affairs (Seco) rising to -33.8 points from -36.9 in October, according to data published on Monday. The indicator thus recovered part of the setback seen in October and now stands 3.4 points above its level in the same month last year. Seco reported year-on-year improvements in the sub-indices for past and expected financial situation and for the appropriateness of major purchases, while expectations for overall economic development remain weaker than a year earlier. The mood among households had been at its lowest level this year in April at -42.4 points following initial tariff announcements by Trump, before improving until July and then deteriorating again in August as higher US tariffs on Swiss exports took effect. The Swiss Market Index outperformed other European markets on Monday, rising 0.4%. The Euro Stoxx 50 ended virtually flat, while Germany’s DAX added 0.1% and France’s CAC 40 dipped 0.1%.

German industrial production rises in October

German industrial output increased by 1.8% in real terms in October compared with September, according to data released on Monday by the Federal Statistical Office, following a revised 1.1% rise in the previous month and leaving production 0.8% higher than a year earlier. The three-month comparison showed that overall industrial production between August and October was still 1.5% lower than in the preceding three months. Construction activity rose by 3.3%, while machinery and equipment output grew 2.8% and production of computer, electronic and optical products advanced 3.9%, although the important automotive sector contracted by 1.3%. Output in energy-intensive industrial branches increased by 0.6% on the month and was 0.6% higher on a three-month basis, but remained 0.1% below its level a year earlier.

Corporate and economic calendar

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

Economic data in focus: German trade balance (08:00), US ADP weekly employment change (14:15) and US JOLTS jobs report (16:00).

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

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