RBA Holds Rates; Asia moves Higher, Global Stocks Mostly Higher

This morning, the financial and equity markets in Asia and the Pacific Rim moved higher. The Central Bank of Australia (RBA) kept its headline cash rate the same and investor uncertainty with the failed Italian referendum vote is fading.

In The Down Under, the S&P ASX 200 was up nearly 0.52 percent thanks to strength in the materials sub-index which rose over one percent. The heavily weighted financial sub-index was up 0.85 percent.

This morning the Reserve Bank of Australia, held its last monetary policy review and decision for the year. The central bank held its main cash rate at 1.5 percent, as expected. The RBA also stated, in the post policy statement, that the rising Australian Dollar could pose a risk for the country’s economic transition. The country is moving away from a resource-led economic base.

As of 09:15 am GMT time, the AUD/USD moved lower to $0.7436.

Later today, other economic data will come from China as their currency reserves for November are due. Japan reported that earnings rose 0.1 percent. This was unchanged from the same time period last year. As far as the main stock bourse in Japan was concerned, the Nikkei 225 was up 0.47 percent. The yen did strengthen against the US Dollar. However, the USD/JPY is currently trades unchanged at 113.85. The yen was neat ¥114 last week.

In South Korea, the Kospi Composite Index was up over one percent after the ministry of finance said it would allocate 68 percent of its budget in the first half of 2017 to boost economic growth.

Looking at currencies, today, the euro was trading, as of 09:00 am GMT time, at 1.078. The EUR/USD Forex market had hit a 20 month low at 1.0503 on Monday. The rebound in the euro is partially thanks to investors digesting the recent “no vote” in Italy on Senate reform as a “no vote” on European Union membership. There was a small sell off in Italian government bonds, which saw yields rise which caused the EUR/USD to move higher and a rally in European stock bourses.