After a long weekend on Wall Street, US stock index futures point higher as well
Asian stocks were mixed-to-higher on Tuesday, with investors staying cautious amid persisting worries about inflation and economy. MSCI’s gauge of Asia Pacific stocks outside Japan rose 0.45%. A more upbeat tone was supported by reports that Biden may announce a rollback of some US tariffs on Chinese consumer goods in the coming days. In particular, Washington may reduce tariffs on $300 billion in Chinese imports. However, the Shanghai Composite index failed to benefit from the news, finishing down less than 0.1% as investor sentiment was somehow hurt by signs of rising COVID infections in the country.
Elsewhere, the RBA raised its cash rate by 50 basis points to 1.35%, as widely expected. The central bank also signaled more tightening ahead in an effort to contain surging inflation. The S&P/ASX 200 index finished 0.25% higher on Tuesday while the AUDUSD pair fell after a rally witnessed at the start of the week. In part, the AUD’s weakness could be attributed to the central bank’s statement about Australian inflation which is “not as high as in many other countries”, suggesting the bank may refrain from more aggressive tightening steps later this year.
In Europe, equities opened higher on Tuesday as positive risk sentiment persists for the time being despite lingering recession concerns. The pan-European Stoxx 600 added 0.4% in early trade, with oil and gas stocks bucking the trend. After a long weekend on Wall Street, US stock index futures point higher as well. Investors are now looking ahead to when the Fed delivers the minutes from its latest monetary policy meeting.
In currency markets, the USD index received another boost, rallying despite upbeat risk sentiment. The greenback climbed back to the 105.50 zone, threatening last week’s highs around 105.65, a break above which would pave the way to fresh twenty-year highs. Against this backdrop, EURUSD plunged below 1.0400 to settle marginally above long-term lows seen around 1.0350 in May.