The Reserve Bank of Australia (RBA) has raised its official cash rate by 25 basis points to 3.6%, which is the 10th consecutive hike since May 2022 when rates were at a record low of 0.1%. However, the RBA has hinted that it may not need to increase rates any further, as consumer spending is slowing down and there is less risk of wage-driven inflation. Instead of using the word "increases," the central bank stated that "further tightening" would be necessary, implying that a single rate hike may be sufficient. This announcement led to a decline in the Australian dollar to a two-month low of $0.670. The next RBA meeting in April is expected to be eventful, and the RBA may choose to halt rate hikes, according to Commonwealth Bank of Australia economist Gareth Aird.
EQUITY
The S&P 500 closed slightly higher than its session low on Monday, with investors keeping a close eye on this week's testimony from Federal Reserve Chair Jerome Powell and the February jobs report. Equities gave up opening gains as US Treasury yields pulled higher, and data showed new orders for US-manufactured goods fell less than expected in January. Sea Ltd.'s earnings are in focus as the company might turn a profit for the first time.
GOLD
Gold prices fell 0.51% on Monday after a week of recovery from support at 1809 and are expected to continue in a major uptrend. Singapore added 45 metric tonnes to its reserve in January, taking part in the recent central bank's purchasing spree.
OIL
Oil prices continue to rise due to concerns over limited spare capacity in the market and uncertainty over Russian supplies, while demand from China is recovering. Traders are awaiting China's oil trade data for January and February to gauge demand recovery following the lifting of pandemic controls.
CURRENCY
The US dollar was uncertain ahead of Federal Reserve Chair Jerome Powell's testimony, while the Australian dollar slid after the Reserve Bank of Australia tempered its hawkish tone despite raising its cash rate. Powell is expected to express concern about inflation but is unlikely to raise expectations for a 50 basis point rate increase on March 22.
