Morning wrap: RBA Hikes Interest Rates (03.02.2026)

• Asian markets delivered a mixed performance. While major Chinese indices eased slightly, Japan’s Nikkei 225 futures rose over 1% toward the close (with the cash market surging more than 3%). South Korean equities also posted robust gains.

• The rally in Japan was propelled by financials and tech. Notably, Mizuho Financial Group climbed 5% following an upbeat earnings release, an upgraded guidance outlook, and the announcement of a fresh share buyback programme.

• Wall Street futures are edging higher in early trading, with the US100 up 0.4% and the US500 gaining 0.25%.

• Palantir shares surged 5% post-market after delivering stellar results. Revenue jumped 70% year-on-year to $1.4bn, beating consensus, while EPS of $0.25 outperformed the anticipated $0.23.

• Conversely, Nvidia shares slipped nearly 3% in after-hours trading. Sentiment was weighed down by comments from the OpenAI CEO, who indicated the firm is exploring alternative chip architectures for its infrastructure build-out.

• The Reserve Bank of Australia delivered a rate hike, taking the cash rate to 3.85%. The move, partially priced in by markets, sent the AUDUSD up over 1%, recovering from a recent slump in precious metals.

• Governor Michele Bullock maintained that the Australian economy remains resilient. Crucially, the RBA raised its year-end interest rate projection to 4.2%, citing elevated inflation forecasts.

• Precious metals are finding a floor. Silver surged over 8% to reach $85 per ounce, while Gold climbed 5% to trade near $4,900 per ounce.

• Goldman Sachs noted that gold remains supported by structural demand, acting as a "strategic hedge" for institutional investors and central banks.

• Energy markets remain soft. Brent is trading below $66 per barrel, with WTI slightly under $62. The market's focus has shifted from Iranian tensions toward the US-India trade pact and the US government shutdown.

• Geopolitical premiums face a potential wipeout. Iran has signalled a readiness for nuclear talks with the US. Analysts suggest that if negotiations commence without friction, the $5–$10 geopolitical premium currently baked into oil prices could be eliminated.

• A historic trade agreement between the US and India will see tariffs on Indian goods slashed to 18% from the current 50% (which included a 25% base rate and a 25% penalty linked to Russian oil imports). In exchange, India will lower barriers for American products. Indian equities rallied sharply on the news.

• Under the terms of the deal, India has committed to cease purchases of Russian crude, pledging instead to ramp up imports of US oil.

• On the domestic front, Donald Trump has urged the House of Representatives to expedite the budget bill to end the partial government shutdown.

• The US non-farm payrolls report, originally due this Friday, is now expected to be postponed.

AUDUSD erased all downward moves related with the metals sell-off. Source: xStation5