- RBA’s rate cut falls short of pleasing share buyers amid doubts over economic growth, Fed policy moves.
- A busy day ahead with political plays, central bank chief’s speech, and a heavy economic calendar.
Growing pessimism concerning the economic outlook and the Fed’s next policy moves continues to disappoint Asian share traders despite RBA’s rate cut while heading into the European open on Tuesday.
A slew of sluggish data from the US has been lately gaining Fed policymakers’ attention, which in turn pushed the Federal Reserve Bank of St. Louis President James Bullard towards indicating a rate cut from the US Federal Reserve.
Wall Street couldn’t justify late-hour U-turn amid overall pessimism. The Dow Jones Industrial Average (DJI30) clanged to the previous close while Nasdaq lost more than 1.6% on tech rout.
In addition to doubts surrounding the Fed next moves, the US-led trade tussles and mostly downbeat data pushed the MSCI’s index of Asia-Pacific shares ex-Japan down by more than 0.3% during the press time.
Japan’s Nikkei portrayed the risk-aversion with nearly -0.13% losses whereas Australia’s ASX 200 benefited from the Reserve Bank of Australia’s (RBA) much anticipated 0.25% rate cut. Further, New Zealand’s NZX 50 lost 1.8% as pessimism surrounding the largest trading partner, Australia, continued to disappoint Kiwi traders. Moving on, India’s BSE Sensex also losses around 0.20% while China’s Hang Seng is down close to 0.30%.
The risk tone improved during the Asian session as lack of negatives from political frontier stopped investors from being further pessimistic. The US 10-year treasury yields, observed to gauge global risk sentiment, gains around 2 basis points to 2.102% while writing.
Investors may now follow headlines from global politics and comments from the Fed Chair in addition to the EU CPI, the UK PMI and the US factory orders to determine near-term trade direction.
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