Bond markets have curbed a little of last week’s enthusiasm about a prospective peak in global interest rates, but still cheered a rate hike in Australia that looks to be the last of the cycle.
The Aussie dollar fell more than 0.8% and Australian government bonds rallied because the 25 basis point hike by the Reserve Bank of Australia came with a softening of language on whether further hikes would be needed.
Two women walk next to the Reserve Bank of Australia headquarters in central Sydney, Australia February 6, 2018. REUTERS/Daniel Munoz
Graphics are produced by Reuters.
Chinese imports grow
It was an otherwise quiet session in the absence of major updates that might have consequences for the interest rate outlook.
Gravity dragged South Korean shares back to earth, with the Kospi, which soared 5.7% on Monday after a short-selling ban was re-imposed, falling 3%.
Three days of strong gains for the MSCI Asia ex-Japan index also came to an end.
Data showed Chinese imports unexpectedly grew in October, a welcome signal on domestic consumption, but exports contracted at a quicker pace than expected, giving a mixed picture overall.
Last week’s chaos in Chinese money markets has subsided but it left behind a glimpse of financial pressures beneath the surface and the challenges around China’s uneven recovery from the COVID-19 pandemic.
British house prices, German industrial output and European producer prices are due later on Tuesday, as are earnings from UBS.
Overnight news from the U.S. included the latest humbling of WeWork, which sought bankruptcy protection. It expects to continue in business, but the move represents an admission by majority owner SoftBank that the office-space firm cannot survive unless it renegotiates its pricey leases.
Israeli Prime Minister Benjamin Netanyahu said his government would consider “tactical little pauses” in fighting to facilitate the entry of aid or the exit of hostages from the Gaza Strip, but again rejected calls for a ceasefire despite international pressure.