The RBA will maintain a restrictive monetary policy until the end of the year.

At the end of Monday, the Dow Jones Index (US30) fell by 0.13%. The S&P 500 (US500) was up 0.39%. The Nasdaq Technology Index (US100) was up 0.71%. The US stock indices changed a little as investors await key earnings reports this week, including Nvidia (NVDA) and major retailers. In after-hours trading, Walmart (WMT) is up 1.5% ahead of its earnings release scheduled for Tuesday morning. Conversely, Alphabet (GOOG) shares are down nearly 1% following reports that the US Justice Department plans to ask a judge to force Google to abandon its Chrome browser, citing antitrust concerns. Tesla is up 5.6% following reports that President-elect Donald Trump’s team is exploring easing regulations for self-driving cars. In addition, shares of Advance Micro Devices (AMD) are up more than 3% after IBM said it had signed a deal with the company to supply MI300x gas pedal chips for its cloud network.

Equity markets in Europe ended trading yesterday on a weak note. Germany’s DAX (DE40) fell by 0.11%, France’s CAC 40 (FR40) closed up 0.12%, Spain’s IBEX 35 (ES35) rose by 0.33%, and the UK’s FTSE 100 (UK100) closed up 0.57%. Nagel, a representative of the ECB’s governing council and president of the Bundesbank, said that if international tensions escalate, this could lead to increased inflationary pressures or increased volatility in consumer price growth, and central banks may have to respond by raising interest rates. His colleague, also a representative of the ECB’s governing council, Stournaras, warned that economic activity could weaken and the Eurozone could fall into recession if the US imposes additional tariffs. Swaps discount the odds of a 25bp ECB rate cut at the December 12 meeting at 100% and a 50bp rate cut at the same meeting at 17%.

WTI crude oil prices traded above $69 per barrel on Tuesday after rising 3.2% in the previous session amid concerns over supply disruptions and ongoing geopolitical tensions. Tensions between Russia and Ukraine escalated after the US and other countries approved Ukraine’s use of US-made long-range missiles on Russian territory, which could draw the US into the conflict. Oil prices were further supported by a weaker US dollar, making oil more attractive to foreign buyers.

Asian markets traded yesterday without any unified dynamics. Japanese Nikkei 225 (JP225) declined by 1.09%, Chinese FTSE China A50 (CHA50) fell by 1.02%, Hong Kong Hang Seng (HK50) rose by 0.77%, and Australian ASX 200 (AU200) yesterday showed a positive result of 0.07%.

Top Chinese officials are gathering for an investment summit in Hong Kong, where the heads of key economic and financial bodies are expected to discuss the latest developments in China’s financial sector. Investors are also focused on the PBOC’s upcoming LPR decision scheduled for Wednesday.

The Australian dollar climbed above $0.65 on Tuesday, rising for the third consecutive session, as investors reacted to minutes from the Reserve Bank of Australia’s November meeting. The minutes showed that the Central Bank plans to maintain a restrictive monetary policy until it is confident that inflation is moving steadily toward the target while remaining cautious about upside risks to inflation. Currently, markets do not expect the RBA to cut the RBA rate until May next year, and the probability of this happening in February is estimated at 38%.