Asian Equities Head Higher On US Rate Cut Bets, RBA On Hold

Asian markets are higher today, with South Korea and Japan both returning from breaks. South Korean equities are the top performing today as tech stocks traded up 1% overnight, with the market bringing forward rate cut expectations to November from December. Locally, focus today has been on the RBA where left rates on hold as widely expected. The RBA also stuck to the line of not ruling anything in or out. The forecast profile sees higher inflation in the near term but still returning to target by end 2025 and the mid point 2026, elsewhere Philippines CPI was below consensus.

• Japanese equities are higher today with the Nikkei 225 is performing better than the Topix largely due to the higher concentrations of tech names in the index. Focus is still on the JPY as it has continued it's slide again, with the USDJPY now trading back at 154.60 vs the lows made on May 3rd of 151.86, the currency may have more room to fall after comments earlier from Kanda where he said "intervention is not necessary if markets are orderly". Focus this week will be on earnings from Toyota and Tokyo Electron. The Topix is up 0.42%, while the Nikkei 225 is up 1.35%.
• South Korean equities have soared higher after returning from a break on Monday, hopes of an earlier Fed rate cut are helping spur chip names higher. Samsung and SK Hynix are the the biggest contributors to the market gains. There is little in the way of economic data out for the next week in South Korea, with focus largely on global events and corporate earnings. The Kospi is up about 2.00%, trading well above all moving averages, while there are increasing greens bars for the MACD indictor and the 14-day RSI has ticked up to 58.
• Taiwan equities are higher today, with semiconductor names the top performing sector. The Taiex is now up 6.71% from lows made the day of the Israel/Iran conflict, and now comfortably trades above all major EMA's while the 14-day RSI sits at 58.5 and the MACD has increasing green bars indicating buyers are in control. Looking ahead focus will turn to CPI due out later today with consensus of 2.20% up from 2.14% in March. The Taiex is up 0.36%.
• Australian equities have benefitted from the RBA keeping rates on hold, the ASX200 was trading 0.77% higher prior to the announcement, and now trades up 1.20% Earlier we had Retail Sales Ex Inflation come in below expectations at -0.4% vs -0.3% and down from 0.40% in 4Q.
• Elsewhere in SEA, New Zealand equities are down 0.25%, Indonesian equities continue to see foreign investors selling, although the market has held up relatively well and trades unchanged today. Malaysian equities are making new all-times-highs, while foriegn investors continue to buy the market is up 0.75% today, Singapore equities are up 0.10%, while Philippines CPI missed estimates earlier coming in at 3.8% vs 4.1% with the PSEi down 0.20%