An Asia stock benchmark climbed as the Hang Seng Index, led by property stocks, advanced more than 1%. Shares inched higher in Japan while Australian stocks declined ahead of the central bank’s interest rate decision later in the day. Contracts for US benchmarks were steady after tech shares led the S&P 500 down on Monday, with Apple Inc. wiping out gains of as much as 2% as investors parsed the potential of a new mixed-reality headset. 

Australian government bond yields and the currency also fell slightly as investors awaited the Reserve Bank’s rate announcement. The consensus view is for policymakers to stand pat, though some see the risk of a hike. 

If the RBA raises benchmark borrowing costs, “as well as the knee-jerk selloff in rates and support for the Australian dollar this should elicit, much will turn on the accompanying statement and whether the Board thinks further tightening is still likely to be required”, Ray Attrill, head of foreign exchange strategy at National Australia Bank Ltd., wrote in a note. 

The dollar and the yen were steady. The yield on the 10-year Treasury was little changed for a second day. Shorter-end US rates edged up after slipping on Monday when a report showed the US services sector nearly stagnated in May, causing a re-evaluation of the Federal Reserve’s interest-rate hike path. 

Oil declined as traders weighed the outlook for supply and demand following Saudi Arabia’s pledge for extra supply cuts. 

Traders in Asia will also be watching the release of consumer price index data in Thailand and Taiwan for fresh indications of the status of the global inflationary cycle.

The US Treasury on Monday began its bill issuance flood that saw buyers storming into the upsized three- and six-month auctions, a move that many have expected will drain liquidity from the system. 

Any move by the government or the Fed that can risk liquidity in the system “is something that will probably keep us in a range-bound mode until we see where it all lands, including the Fed’s final decision on rates,” Sylvia Jablonski, CEO and chief investment officer at Defiance ETF, said on Bloomberg Television.

Elsewhere, gold was steady on Tuesday after advancing 0.7% in the previous session. DM