It may not stop a nation like the Melbourne Cup today, but the latest interest rate decision from the Reserve Bank of Australia will be closely watched by investors on Tuesday.
As the odds of no change in rates at 2:30 pm AEDT (3:30 am GMT) are high, it will be the comments by RBA Governor Michelle Bullock on the outlook that will be the focus of the Australian Securities Exchange (ASX) where prices are expected to open slightly lower after a mixed night in New York.
The S&P/ASX 200 index should start nine points under the closing level of Monday, according to futures trading on the ASX, with the December contract of the share price index last trading at 8,894 points.
Two of Wall Street’s three main price marks finished higher on Monday (Tuesday AEDT) due to artificial intelligence (AI) deals and despite doubts about the economic outlook owing to a scarcity of relevant economic data.
While the Dow Jones Industrial Average dropped 0.5%, the S&P 500 rose 0.2% and the Nasdaq Composite climbed 0.5% as it was boosted by gains in large technology shares.
The drivers of price strength included Amazon’s $38 billion deal with OpenAI and gains in NVIDIA shares.
"The Amazon deal and other M&A news have boosted the market, and then you know we came into the week after getting marginally positive news over the weekend, both about the China trade situation and some dovish Fed speak," Baird investment strategy analyst Ross Mayfield was quoted in a Reuters story as saying.
Australian shares had finished slightly higher on Monday ahead of the RBA policy meeting, with expectations for a Melbourne Cup Day rate cut dashed by stronger-than-expected inflation figures.
In fixed interest markets, the yield curve continued to steepen as two-year rates were steady at 3.608% while 10-year rates rose 0.05% to 4.347%.
