IG Markets - Afternoon thoughts
Across Asia, regional markets are mainly higher led by a strong performance from bank stocks which are advancing in line with US leads. The Hang Seng is the region's best performer, rising 0.7% while the Nikkei 225 is 0.5% firmer. Elsewhere, the Shanghai Composite and the Kospi are trading flat.
In Australia, the ASX 200 is currently 0.5% firmer at 4674, just off its earlier highs of 4681. Gains for the day are broad based with the materials, industrials, financials and energy sectors all convincingly higher. The telecoms and healthcare sectors are the only losers on the day.
Today's trading has seen the market move broadly higher but without any major conviction. While most sectors are higher you get the feeling the market is just following in the footsteps of US leads - trading higher because it is expected too.
The talking point of the day has undoubtedly been the release of the RBA's monetary policy meeting minutes. While the decision to hold fire on rates in October was always thought to be a close call, it was the RBA's acknowledgement that the high AUD was helping keep inflation in check and "represented a tightening of domestic financial conditions" that explained its decision to sit tight.
Having had time to digest the implication of the minutes, foreign currency markets seem to be suggesting that rate hikes may be off the agenda until early next year. Having immediately surged from 0.9930 to 0.9960 after the release of the minutes, the AUD is now trading back at 0.9885 and may fall even further once European and US markets come on board and also potentially rule out further rate hikes this year.