Asia-Pacific markets set to rise with Reserve Bank of Australia decision, China loan prime rate on deck

CNBC

19-05-2025

Cityscape image of Sydney, Australia with Harbor Bridge and Sydney skyline during sunset. Vacation and travel in Australia.
Prasit Photo | Moment | Getty Images
Asia-Pacific markets were set to climb Tuesday as investors look toward the Reserve Bank of Australia's policy rate decision, as well as the listing of the world's largest battery manufacturer Contemporary Amperex Technology.
Japan's benchmark Nikkei 225 is set to open higher, with the futures contract in Chicago at 37,640 while its counterpart in Osaka last traded at 37,570, against the index's last close of 37,498.63.
Likewise, Australia's benchmark S&P/ASX 200 is set to rise, with futures standing at 8,384, higher than the index's close of 8,295.1.
Futures for Hong Kong's Hang Seng index stood at 23,378, slightly higher than its last close of 23,332.72.
The Reserve Bank of Australia is slated to release its policy rate decision later in the day.
Australia's inflation has been easing, with the most recent headline inflation coming in at a four-year in at a four-year low of 2.4% in the first quarter of 2025.
The Reserve Bank of Australia has emphasized in its previous monetary policy statement that bringing inflation to its 2% to 3% target range sustainably remains its highest priority. The Commonwealth Bank of Australia expects the RBA to cut the cash rate by 25 basis points to 3.85%.
The RBA said in its previous monetary policy statement that returning inflation sustainably to its target of between 2% and 3% "within a reasonable timeframe" is its highest priority.
China is also slated to report its loan prime rate decision. The People's Bank of China is expected to cut its 1-Year Loan Prime Rate (LPR) and 5-Year LPR by 10 bps to 3.00% and 3.50% respectively, said Lazard's Chief Markets Strategist Ronald Temple.
"While the decrease is very small, it is yet another signal that the central government is still working to stimulate economic activity, albeit in a suboptimal and insufficient manner," Temple said in a note late Monday.
Investors are also looking toward the listing of the CATL on the Hong Kong stock exchange, in what will reportedly be the largest global listing in 2025.
U.S. stock futures were little changed. S&P 500 futures rose less than 0.1%. Nasdaq 100 futures were down 0.1%, while futures tied to the Dow Jones Industrial Average added 54 points, or 0.14%.
Overnight stateside, the three major averages closed higher. The S&P 500 posted a slim gain on Monday as Treasury yields came off their highs and investors sought to look past Moody's downgrade of the United States' credit rating. The benchmark added 0.09% and closed at 5,963.60, marking its sixth consecutive winning session.
The Nasdaq Composite inched up 0.02% to end at 19,215.46. The Dow Jones Industrial Average rose 137.33 points, or 0.32%, and settled at 42,792.07. The 30-stock index was aided by a rebound in UnitedHealth, which saw an 8% jump after a recent bout of hard selling.
— CNBC's Lisa Kailai Han and Alex Harring contributed to this report.
The S&P 500 closed marginally higher on Monday.
The benchmark added 0.09%, finishing at 5,963.60. The Dow Jones Industrial Average rose 137.33 points, or 0.32%, settling at 42,792.07, while the Nasdaq Composite edged up 0.02% and closed at 19,215.46.
— Lisa Kailai Han
U.S. Secretary of the Treasury Scott Bessent speaks with China's Vice Minister of Finance Liao Min, on the day of a bilateral meeting between the U.S. and China, in Geneva, Switzerland, May 11, 2025.
Keystone/eda/martial Trezzini | Via Reuters
China said Monday that the U.S. has undermined a preliminary trade deal between the two countries after the U.S. warned industry against using Huawei chips.
"China urges the U.S. to immediately correct its wrong practices and stop discriminatory measures against China," a spokesperson for China's Ministry of Commerce told a reporter, according to a Google translation.
"If the U.S. insists on its own way and continues to substantially damage China's interests, China will take resolute measures to safeguard its legitimate rights and interests," the spokesperson said.
— Kevin Breuninger, Spencer Kimball