Asian Stock Market: ASX leads Pacific bulls on RBA’s dovish surprise, recession woes tame optimism

• Asia-Pacific markets remain mildly positive amid softer US data, hopes of Sino-American ties.
• Yield curve inversion renews recession fears and weigh on market’s optimism amid US holiday.
• Australia’s ASX rises half a percent on RBA’s surprise status quo.
• Japan intervention, inflation fears from South Korea also prod Asian equity buyers.

Market sentiment in the Asia-Pacific region remains slightly upbeat during early Tuesday as traders juggle between the recession woes and the Reserve Bank of Australia’s (RBA) inaction. Also restricting the trading sentiment could be the mixed concerns about the Sino-American ties, as well as the US holiday.

Amid these plays, MSCI’s index of the Asia-Pacific shares outside Japan rises 0.30% whereas Japan’s Nikkei 225 bucks the trend with a 0.90% intraday fall, so far, to 33,461 heading into Tuesday’s European session.

It’s worth noting that Australian equities recently witnessed a boost from the Reserve Bank of Australia’s (RBA) no rate hike decision, which in turn propels the benchmark ASX to an intraday high of near 7,285, up half a percent by the press time. That said, Australia’s 10-year Treasury bond yields dropped nearly 45 basis points (bps) to 3.97% after the RBA announcements.

On a border front, S&P500 Futures retreated even as Wall Street managed to post minor gains whereas US two-year Treasury bond yields rose to 4.93% while the 10-year counterpart printed mild gains around 3.86% by the end of Monday’s North American trading session.

It’s worth noting that the Chinese stocks are mildly positive as US Treasury Secretary Janet Yellen is in Beijing for diplomatic talks whereas South Korea’s KOSPI drops 0.30% intraday as the Bank of Korea (BoK) flagged inflation woes earlier in the day.

Elsewhere, New Zealand’s NZX50 traces its Aussie counterpart while posting nearly 0.30% intraday gains but Indian equities remain lackluster around the record tops after an upbeat day.

It should be observed that the hawkish bias surrounding the US Federal Reserve (Fed) ignores recently downbeat US data but manages to check the equity bears of late.

Moving on, share traders should pay attention to the risk catalysts for clear directions amid the US holiday and light calendar elsewhere.

Also read: Forex Today: Dollar weakens after data, attention turns to RBA