The RBA’s March meeting minutes reinforced a “lower for longer” view
Wall Street stocks hit new record highs overnight ahead of the U.S. Federal Reserve meeting that starts today. Investors also continued to cheer the stimulus package signed last week by President Joe Biden. As such, the Dow Jones Industrial Average gained 0.53% and S&P 500 rose 0.65%, the Nasdaq Composite added more than 1% as US Treasury yields retreated from recent highs.
Following suit, Asian markets rallied on Tuesday, as investors looked to key central bank meetings this week. While the Federal Reserve meeting concludes on Wednesday, the Bank of England meets on Thursday, and the Bank of Japan wraps up a two-day gathering on Friday. Australia’s S&P/ASX 200 jumped 0.80% after the RBA’s March meeting minutes reinforced a “lower for longer” view. Japan’s Nikkei 225 rose 0.52% and Hong Kong’s Hang Seng index gained 0.67%. The Shanghai Composite gained 0.78%.
European stocks opened in the green despite turmoil in vaccine rollouts in the region after several countries decided to suspend the AstraZeneca vaccine, citing safety fears. The pan-European STOXX 600 index rose 0.4% in early trading.
Meanwhile, the dollar remains on the offensive on Tuesday. However, the buying pressure looks limited as traders remain cautious ahead of central banks’ meetings. EURUSD continues to hold above 1.1900 while the USDJPY pair extends its ascent, staying above the 109.00 figure during the European hours. Later today, the US retail sales data could affect short-term dynamics in USD pairs.
Elsewhere, oil prices have been under pressure for the third day in a row, though the downside momentum looks limited, with Brent crude holding above the $68 figure after failed bullish attempts around the $70 barrier at the beginning of the week. However, should the API data point to another rise in crude oil inventories, the downside pressure could intensify in the short term.
