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RBA Holds Cash Rate at Record Low of 0.1%, SENSEX Advances 0.7%, Philippines Equities Gain

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RBA Holds Cash Rate at Record Low of 0.1%
The Reserve Bank of Australia left its cash rate unchanged at a record low of 0.1% during its April meeting, as widely expected. Policymakers reaffirmed their commitment to maintaining highly supportive monetary conditions until at least 2024 when actual inflation is sustainably within the 2 to 3% target. The board also remains committed to the 3-year government bond yield target of 10 basis points. Later in the year, it will consider whether to retain the April 2024 bond as the target bond or to shift to the next maturity. It added that the second $100 billion government bond purchase program will start next week. Regarding CPI inflation, it is expected to rise temporarily because of the reversal of some COVID-19-related price reductions. On rising housing prices, the bank said it will monitor trends in borrowing carefully and it is important that lending standards are maintained.
SENSEX Advances 0.7%
The BSE SENSEX gained 330 points or 0.7% to 49,483 in early trade on Tuesday, rebounding from a sharp sell-off in the prior session and after a rally in Wall Street overnight. Traders were upbeat after the ISM Services PMI in the US hit a record high in March; while services PMI in China picked up to a three-month high in the month, as did the composite PMI. On the pandemic front, some Indian states have asked New Delhi to widen vaccinations, after the second surge in infections that has eclipsed the first wave. Meantime, India’s Panacea Biotec has agreed to produce 100 million doses of Russia’s Sputnik V COVID-19 vaccine annually. Traders now await the outcome of the Indian central bank’s monetary policy committee meeting on Wednesday. Policymakers are widely expected to keep key interest steady but may revise their inflation projections higher. Power Grid Corp and Mahindra and Mahindra Ltd added 1.9% and 1.8%, each.
Philippines Equities Gain
The PSE Index rose 33 points or 0.5% to 6,528 in early deals on Tuesday, tracking Wall Street that ended sharply higher overnight after the ISM Services PMI jumped to a record 63.7 in March, while Friday’s report showed US non-farm payrolls surged 916,000 in the month. Investors cheered upbeat Chinese data where services activity grew the most in three months. In local news, meantime, annual inflation in the Philippines fell to 4.5% in March from a 26-month high of 4.7% a month earlier, but remained above the central bank’s target of 2 to 4%. On the COVID-19 side, local media reports said that Manila has sought the help of the UN health agency as the country experiences resurgence of cases amid the presence of more contagious variants. Traders showed a muted response to reports that aides of President Rodrigo Duterte criticized China for anchoring hundreds of its vessels in the disputed South China Sea areas, warning it could lead to unwanted hostilities.

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