Asia stocks edge higher as investors await RBA minutes

  • Stocks in Asia edged higher in Tuesday morning trade.
  • Investors await the release of the Reserve Bank of Australia's July meeting minutes for more clues on where the central bank could move next on interest rates.
  • The People's Bank of China is set to debut its new loan prime rates under a new mechanism that was unveiled over the weekend.

Stocks in Asia edged higher Tuesday morning as investors await the release of minutes from the Reserve Bank of Australia's July meeting. The People's Bank of China is also set to publish its new loan prime rates under a new mechanism.

In Japan, the Nikkei 225 rose 0.21% in early trade, while the Topix index added 0.31%. Australia's S&P/ASX 200 gained 0.39% as most of the sectors traded higher. Over in South Korea, the Kospi advanced 0.12%.

Overall, the MSCI Asia ex-Japan index traded 0.04% higher.

Meanwhile, investors await the release of the Reserve Bank of Australia's July meeting minutes on Tuesday for more clues on where the central bank could move next on interest rates.

China's new loan prime rates

The People's Bank of China (PBOC) is also set to debut its new loan prime rates (LPR) under a new mechanism that was unveiled over the weekend. Some analysts have said the reform can be seen as a guided rate cut.

"The new fluctuating LPR replaces their existing fixed benchmark lending rate," Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, wrote in a Monday note. "By allowing the rate to float, they are basically allowing interest rates to fall."

"The lower the rate, the more positive the reaction in the market," Lien said. "Aside from this rate cut, investors are also waiting for fiscal stimulus from China."

Asia-Pacific Market Indexes Chart

Overnight stateside, the Dow Jones Industrial Average surged 249.78 points to close at 26,135.79. The S&P 500 rose 1.2% to finish its trading day at 2,923.65, while the Nasdaq Composite added 1.4% to close at 8,002.81.

These gains add to a rebound that started last week after the Dow posted its worst session of 2019. The S&P 500 is still down 1.9% in August and off more than 3% from a recent record.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.363 after seeing lows below 97.5 last week.

The Japanese yen traded at 106.53 against the dollar after weakening from levels below 106.5 yesterday. The Australian dollar was at $0.6755 after seeing highs above $0.678 in the previous session.

What's on tap

  • Australia: Reserve Bank of Australia minutes from July meeting at 9:30 a.m. HK/SIN
  • China: People's Bank of China publishes new loan prime rates under new mechanism.
  • Hong Kong: Consumer Price Index for July at 4:30 p.m. HK/SIN

— Reuters and CNBC's Fred Imbert contributed to this report.

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