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February 3rd - Todays interest rate hike was a difficult decision for the Reserve Bank of Australia (RBA), as it had just cut rates last August. The RBA had previously bucked the trend of other economies, deliberately keeping rates low for an extended period to prevent soaring unemployment. Now, it becomes the first major central bank to return to a rate-hiking path since the pandemic began. Some economists had predicted that the RBA might wait for more data, given recent slowing monthly inflation data and the strengthening Australian dollars potential to "cool" the economy. Domains chief economist, Nicola Powell, stated that while the rate hike would reduce borrowers ability to finance their homes, it would also weaken the upward momentum in the housing market. Assuming lenders fully pass on the cost of the rate hike, a borrower with a $600,000 loan would see their monthly payment increase by approximately $90. The focus now shifts to the tone set by Governor Bullock at the post-meeting press conference. Economists are currently uncertain whether the RBA will continue with rate hikes or if this is a one-off event.February 3 - The Reserve Bank of Australia raised interest rates by 25 basis points to 3.85%, in line with market expectations, after holding rates steady for three consecutive days.The Reserve Bank of Australia (RBA) set its interest rate at 3.85% on February 3, in line with expectations and down from 3.60% previously.On February 3rd, DBS Bank senior economist Radhika Rao stated in a report that the Indian market is poised for a rebound following the announcement of the US-India trade agreement. She noted that high tariffs were a major factor dragging down market sentiment over the past quarter, while the agreement is "undoubtedly a significant boon to the real economy and exports," and will also boost financial market sentiment. Rao added that textiles, gems and jewelry, engineered products, leather, and chemical products are expected to be the main beneficiaries. She wrote that considering the punitive tariffs previously imposed for purchasing Russian oil, the reduction from 50% to 18% effectively brings Indias tariff levels close to those of most Southeast Asian countries.According to sources, Republican leaders in the U.S. House of Representatives are planning to vote next week on a key bipartisan housing bill.

Hang Seng Index, ASX200, Nikkei 225: Bulls Deliver Friday Support

Jimmy Khan

Mar 03, 2023 14:49


Industry Snapshot

Asian stock markets had a positive start, with the Hang Seng Index, ASX 200, and Nikkei 225 all rising.

Despite a tightening labor market and a sharp rise in labor costs, US economic data failed to push risky assets into the red. Initial applications for unemployment decreased from 192k to 190k, and unit labor expenses increased by 3.2% in Q4 compared to Q3's 2.0%. The more aggressive Fed interest rate track to achieve goal inflation was backed by the most recent labor market data.


Bostic, a member of the FOMC, softened the impact by emphasizing the need for gradual increases in interest rates. Bostic wants to raise rates by 25 basis points later this month, allaying concerns about a 50-basis point increase.


The Dow Jones and S&P 500 both saw increases of 1.05% and 0.76% on Thursday, while the NASDAQ Composite Index increased by 0.73%. The US Futures, however, predicted a more tense Friday session. This morning, the NASDAQ mini fell by 34 points while the Dow mini lost 36 points.


Later today, the US ISM Non-Manufacturing PMI data and several FOMC members' remarks may revive Fed Fear. Support for risky assets would be put to the test by a further uptick in service sector activity and a steep rise in the ISM Non-Manufacturing Prices Index combined with aggressive Fed comments. Logan, Bowman, and Bostic, members of the FOMC, will speak today.

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