Asian stocks edged up on Tuesday as investors awaited the Reserve Bank of Australia’s policy meeting in which it is expected to keep interest rates steady.
European stocks touched an eight-month high on Monday, then reversed as trading wound down in the absence of U.S. markets, which were closed for Labor Day.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3 percent.
Australian shares slipped 0.3 percent ahead of the RBA’s announcement.
All 33 economists polled by Reuters expected the RBA to hold steady at the last meeting to be chaired by long-standing Governor Glenn Stevens, and those views have been reinforced by a spate of upbeat economic data on Monday and Tuesday.
Having already pulled the trigger on easings in May and August, the RBA is likely to wait for them to percolate through the economy before deciding if yet more stimulus is needed.
“Today’s RBA meeting looks unlikely to provide investors with any reason to change their macro outlook,” Ric Spooner, chief market analyst at CMC Markets in Sydney, wrote in a note.
“The RBA will be likely to wait on more information from the U.S. [Federal Reserve] and on local inflation pressures before signalling its next move.”
Japan’s Nikkei stock index was up 0.2 percent, with the dollar rising 0.1 percent on the day to 103.52 yen, after retreating 0.6 percent on Monday.
While Bank of Japan Governor Haruhiko Kuroda conveyed readiness to ease monetary policy further in a speech on Monday, he acknowledged that the central bank’s negative rates may hurt confidence in Japan’s banking system, a sign that the central bank is becoming more mindful of the rising cost of its stimulus.
“For those who had been believing in a Kuroda who stresses only the benefits of easing, the speech would have been disappointing,” said Makoto Noji, senior strategist at SMBC Nikko Securities.
“To be sure, he is unlikely to change his policy framework given that he was preaching the benefit of stimulus. Yet many market players might have felt that the costs are likely to outweigh the benefits in the future,” he added.
The dollar index, which tracks the greenback against a basket of six major peers, slipped 0.1 percent to 95.731.
Leaders from the world’s top economies broadly agreed at a summit in China on Monday to coordinate macroeconomic policies, but few concrete proposals emerged to meet growing challenges to globalization and free trade.
The British pound inched up 0.1 percent to $1.3314. The sterling touched a seven-week high against the dollar on Monday after a survey showed the nation’s dominant services sector had the biggest one-month gain in at least 20 years, beating all forecasts in a Reuters poll.
The euro was steady at $1.1154.
“The European day starts with German factory orders. A small rise is expected after the similar decline in the previous month,” Marshall Gittler, head of investment research at FXPrimus, said in a note. “A good factory-orders number could boost the euro.”
Crude oil futures rose after top producers Russia and Saudi Arabia confirmed they had agreed to cooperate on stabilizing the oil market on Monday.
U.S. crude jumped 1.9 percent to $45.28, while Brent crude was up 0.1 percent at $47.68 a barrel.