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Marketmind: Australia hikes but tempers its outlook

Published 07/11/2023, 04:32 pm
Updated 07/11/2023, 04:36 pm
© Reuters. Two women walk next to the Reserve Bank of Australia headquarters in central Sydney, Australia February 6, 2018. REUTERS/Daniel Munoz/File Photo
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A look at the day ahead in European and global markets from Tom Westbrook:

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.

The ASX200 lifted from mid-session lows.

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.

Read Reuters' exclusive report on what happened here: Clashing priorities behind China's rare money market distress.

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.

Without a Fight won the 163rd Melbourne Cup by two lengths.

Key developments that could influence markets on Tuesday:

Earnings: UBS

© Reuters. Two women walk next to the Reserve Bank of Australia headquarters in central Sydney, Australia February 6, 2018. REUTERS/Daniel Munoz/File Photo

Economics: German industrial output, Euro zone producer prices, UK house prices, NY Fed household debt report

Speakers: Fed's Waller, Logan and Schmid, ECB's de Guindos and McCaul, BoC's Kozicki

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