On Monday, all three major stock indexes on Wall Street finished at record highs on increasing signs the United States and China are inching closer to a truce in their trade war and on optimism the U.S. economy is well poised for solid consumer-driven growth.
On the trade front, Chinese President Xi Jinping on Tuesday called for consultation and cooperation to resolve international disputes. Xi's remarks, made at the opening ceremony of the China International Import Expo. That came following recent positive developments regarding the ongoing U.S.-China trade war. The U.S. Commerce Secretary Wilbur Ross said on Sunday that U.S.-China trade deal expected to be signed between U.S. President Donald Trump and Chinese President Xi Jinping. Ross said the agreement could be reached by the two leaders in one of several locations, including Iowa, Alaska, Hawaii or somewhere in China.
The deal was originally anticipated to be inked at this month's Asia-Pacific Economic Cooperation summit in Chile, an event that has since been cancelled due to protests in the country. China said Friday it reached a consensus with the U.S. in principle following talks last week. Last month, U.S. President Donald Trump said both sides had come to a very substantial phase one trade agreement that is expected to be signed later in November.
Markets were also focused on the Reserve Bank of Australia's policy review due later in the day. Market pundit expects the central bank to stand pat but cut at least once more early next year to revive inflation and a slowing economy.
Banks stocks were mostly higher. Commonwealth Bank of Australia advanced 1%, while National Australia Bank, which is due to report results on Thursday, added 1.2%.
Shares in Westpac Banking, the country's second-largest lender, slipped after lender reported a 15% slide in its full-year cash earnings and cut its dividend for the first time in a decade. It also announced completion of an A$2 billion share placement on Tuesday as it seeks to beef up capital levels amid tougher regulatory requirements.
Austal (ASB) was up 1% after successfully completing trials for a combat ship it's building in Alabama for the U.S. Navy.
ECONOMIC NEWS: Australia AiG Services Sector Improves Significantly In October -- Australia services sector accelerated in October with a Performances of Services Index score of 54.2, the latest survey from the Australian Industry Group revealed on Tuesday. That's up from 51.5 in September and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Individually, sales, employment, new orders, supplier deliveries, capacity utilization, input prices and average wages all continued to expand - while finished stocks and selling prices fell deeper into contraction territory.
CURRENCY NEWS: The Australian dollar, sensitive to shifts in broader risk appetite, was steady against greenback following a poor retail sales print for the month of September and ahead of RBA rate decision. The Australian dollar changed hands at $0.6913.
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