Asia stocks climb.
Most Asian stock markets advanced on Tuesday, with Japan’s Nikkei hitting a record high on optimism over the U.S.-China tariff truce extension, while shares in Sydney also set a fresh peak after the Reserve Bank of Australia reduced rates as anticipated.
Wall Street ended modestly lower on Monday, but major benchmark indices remain supported near record highs amid Federal Reserve rate cut hopes.
U.S. stock index futures were largely unchanged in Asian trading on Tuesday.
RBA cuts rates by 25bps; stocks at record
The Reserve Bank of Australia lowered its interest rates by 25 basis points to 3.60% on Tuesday, in a move widely anticipated by markets.
Tuesday’s move marks the RBA’s third cut this year, following its surprise decision to keep rates unchanged in July.
After the hold, bets for a cut had strengthened amid weak inflation prints and signs of a cooling labour market.
Oil gains.
Oil prices rose on Tuesday as the United States and China extended a pause on higher tariffs, easing concerns an escalation of their trade war would disrupt their economies and crimp fuel demand in the world’s two largest oil consumers.
Brent crude futures gained 27 cents, or 0.4%, to $66.90 a barrel by 0540 GMT, while U.S. West Texas Intermediate crude futures rose 24 cents, or 0.4%, to $64.20.
U.S. President Donald Trump extended a tariff truce with China by another 90 days, a White House official said on Monday, staving off triple-digit duties on Chinese goods as U.S. retailers prepared for the critical end-of-year holiday season.
This raised hopes that an agreement could be attained between the world’s two largest economies and avert a virtual trade embargo between them. Tariffs risk slowing global growth, which could sap fuel demand and drag oil prices lower.
Oil’s gains have also been supported by fresh signs of softness in the U.S. labour market, which have boosted expectations for a Federal Reserve rate cut in September, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.
Dollar advances against yen.
The dollar firmed against the yen on Tuesday and held its ground against the euro and sterling, as markets braced for a U.S. consumer inflation report later in the day that could shape expectations for Federal Reserve interest rate cuts.
A moderate reading on price pressures could cement bets for a Fed rate reduction next month, but if signs emerge that U.S. President Donald Trump’s tariffs are stoking inflation that might keep the central bank on hold for now.
The dollar added 0.2% to 148.40 yen as of 0444 GMT.
The euro edged slightly higher to $1.1622, while sterling eased slightly to $1.3426.
The dollar index – which measures the currency against those three counterparts and three more rivals – was steady at 98.476, after advancing 0.5% over the past two sessions.
Prior to that, the dollar had retreated as Trump’s dovish-leaning pick to replace a Fed governor, and similarly inclined potential candidates for chairman, led traders to increase bets on Fed policy easing.
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