Asia stocks hit 2-1/2-year high on China's stimulus measures

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Asia stocks hit 2-1/2-year high on China's stimulus measures

SINGAPORE - Asian stocks were perched at their highest in more than two months on Tuesday as expectations for more U.S. rate cuts kept risk sentiment aloft, while investors awaited a policy decision from Australia's central bank.

"The RBA is likely to stick to its hawkish stance for now, aiming to keep inflation expectations anchored," said Charu Chanana, head of currency strategy at Saxo. China's central bank on Monday lowered its 14-day repo rate by 10 basis points, days after disappointing markets by not cutting longer-term rates.

Markets are currently evenly split on whether the U.S. central bank will go for another 50 bps cut or a 25 bps cut in November, CME Fedwatch tool showed. They are pricing in 76 bps of easing this year. The euro was steady at $1.11055 in early Asian hours, having dropped about 0.5% on Monday as business activity reports for the euro zone economy disappointed, raising expectations for more interest rate cuts by the European Central Bank this year.

 

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