ASX rises ahead of RBA decision; $A jumps

Elsewhere, Wall Street closed out its latest winning month with another tick higher to kick off its week.

The S&P 500 added 0.1 per cent to cap its fifth straight month of gains. That’s its longest winning streak in nearly two years, and the index is at a 16-month high after rallying on hopes cooling inflation will mean the economy can avoid a long-predicted recession.

The Dow Jones climbed 0.3 per cent and the Nasdaq composite rose 0.2 per cent.

Big names in the market, such as Rob Arnott at Research Affiliates, are warning not to be “overly hasty in popping the champagne corks.” Arnott sees the possibility of inflation rebounding again later this year, even though it’s cooled considerably recently.

Roughly halfway through the earnings reporting season, more companies than usual have topped analysts’ profit expectations, according to FactSet. Companies also seem to be more optimistic about their upcoming results, giving better-than-expected forecasts more often than usual, according to strategists at Bank of America.

“While economic uncertainty remains, we believe the profit cycle is inflecting higher,” the strategists wrote in a BofA Global Research report.

In stock markets abroad, indexes in Europe were mixed after data showed Europe’s economy has grown modestly after months of stagnation.

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In Asia, stocks rose in Hong Kong and Shanghai amid hopes Beijing will deliver more stimulus for the sluggish Chinese economy.

In the bond market, US Treasury yields slipped after a report suggested manufacturing in the Chicago region is weakening a bit more than economists expected. Manufacturing has been one of the hardest-hit areas in the economy by high interest rates, which work with a notoriously long lag effect.