A look at the day ahead in European and global markets from Tom
Westbrook
Central bank moves in Asia on Tuesday went as telegraphed, with
Japan raising its short-term policy rate to 1% - the highest
since 1995 - and Australia leaving rates on hold at 4.35%.
Neither the yen nor the Australian dollar made sharp initial
reactions.
Focus falls next on press conferences in Sydney and Tokyo,
with investors expecting reasonably hawkish outlooks - having
priced another hike in Japan this year and a 65% chance of a
further hike in Australia.
Reserve Bank of Australia Governor Michele Bullock is due at
0530 GMT and Bank of Japan Deputy Governor Shinichi Uchida, who
is filling in for a hospitalised Kazuo Ueda, an hour later.
Japan's hike brought rates to the bottom of where
policymakers estimate the economy's neutral rate lies, but came
with a pause - which had also been signalled - in the central
bank's extrication from the bond market.
It will reduce its bond buying by about 200 billion yen
($1.25 billion) a quarter until April 2027 when it will level
off with JGB buying at around 2 trillion yen a month.
Elsewhere, traders were unwilling to take markets higher on
the tentative peace made over the weekend between the U.S. and
Iran. Oil prices held above $80 a barrel, details of the deal
were scarce and shippers said it could take weeks to rebuild the
confidence to safely navigate the Strait of Hormuz.
SoftBank shares were steady after Reuters reported
the chief financial officer of the Vision Fund investing arm is
leaving after a decade.
Chinese data was patchy in May, with retail sales falling
for the first time in more than three years and weighing on
market mood, with stocks down in Hong Kong.
Overnight, Wall Street had notched gains. In after-hours
trade SpaceX's market value surpassed $2.6 trillion as
the stock rallied to some 48% above its listing price.
Nvidia ( NVDA ) threw debt markets a curveball with a
surprisingly big $25 billion bond issuance, which it says it
will use for refinancing and general purposes.
Key developments that could influence markets on Tuesday:
- Economics: German ZEW survey
($1 = 160.0700 yen)
(Editing by Jamie Freed)