Main PageNovember 3, 2026

investingLive Asia-Pacific market news: RBA hikes to 18-year high

Summary:

  • Oil ticked higher after Monday’s roughly 4% slump, as the US struck sites on Iran’s Qeshm Island following the reported downing of a US MQ-9 Reaper drone
  • A senior US official reportedly said the strike responded to Iran firing at a US aircraft and did not mark the start of expanded US operations
  • The RBA raised its cash rate 25 basis points to 4.85% in a 6-3 vote, the highest in 18 years; the Australian dollar fell after the decision
  • The PBOC raised banks’ FX reserve requirement by 2 percentage points and set a weaker yuan fixing; the offshore yuan fell 0.26% to 6.6642 per dollar, its biggest daily drop since June
  • Asian equities mostly followed US tech lower, led by a 3.7% fall in South Korea’s Kospi; Japan was closed for a holiday
  • Apple guided to 7% to 10% holiday-quarter revenue growth but a lower 45% to 46% gross margin on rising memory costs; Oracle is reportedly pricing its $10 billion share sale at an 11% discount

Oil prices edged higher in Asian trade on Tuesday after US strikes on Iran’s Qeshm Island, partly (small) reversing Monday’s slide on hopes for a diplomatic breakthrough. The Reserve Bank of Australia lifted interest rates to their highest level in 18 years, while moves by China’s central bank pushed the yuan lower and regional equities tracked a weaker lead from US technology stocks.

Oil and Iran

Crude ticked up after falling about 4% on Monday, when mediated talks between Iran and the US raised hopes of a deal. US aircraft struck Iranian sites on Qeshm Island, at the mouth of the Strait of Hormuz, after Iran shot down a US MQ-9 Reaper drone, according to reports. A senior US official was reported as saying the strike was a response to Iran firing at a US aircraft on Monday, rather than the start of a wider campaign.

The Wall Street Journal had earlier reported that the US has carried out a series of limited, unannounced strikes on Iran in recent weeks, and that Gulf states were told to prepare for a short, intense operation after the US midterm elections. President Donald Trump said on Monday the US had not been fighting Iran for months and answered “no” when asked about post-election strikes, though officials said he is weighing all options.

Separately, Axios reported that CIA Director John Ratcliffe has advised Trump to maintain a “no war, no deal” approach and let economic pressure continue. Iran said contacts with Washington continue through mediators after talks with Qatari officials ended without a breakthrough, with its condensed seven-step proposal still the basis for discussions.

RBA and the Australian dollar

The RBA raised its cash rate by 25 basis points to 4.85%, its fifth increase this year. Six board members voted for the move and three preferred to hold. The bank lifted its inflation forecasts materially, now seeing headline inflation peaking at 4.5% and staying above 3% until late 2027, citing higher fuel costs and tighter domestic capacity. It said it would remain attentive to the data, without explicitly signalling further hikes.

The Australian dollar, already softer on weakness in the yuan (see below), fell after the decision, which had been widely expected. The split vote prompted some market speculation that this could be the final hike of the cycle, although the board gave no such signal.

Reserve Bank of Australia Governor Bullock’s press conferences is still to come, due at 0430 GMT / 2330 US Eastern time. 

China and the yuan

The People’s Bank of China said it would raise the foreign exchange deposit reserve ratio for financial institutions to 6% from 4%, effective November 15, a move that reduces onshore dollar liquidity. It also set its daily reference rate with the dollar higher. Together, the steps point to a desire to slow the yuan’s recent appreciation, and could herald a period of consolidation for the currency. With Chinese interest rates low relative to peers, that could also add to the offshore yuan’s appeal as a funding currency.

The offshore yuan fell 0.26% to 6.6642 per dollar, its largest daily decline since June.

Regional equities

Most Asian markets followed US technology shares lower. South Korea’s Kospi fell 3.7% and the Kosdaq dropped 3.8%, extending recent pressure on the region’s chip-heavy markets. China’s Shanghai Composite slipped 0.7%, while Hong Kong’s Hang Seng bucked the trend to gain 0.4%. Japanese markets were closed for a public holiday. US midterm elections take place on Tuesday.

Earnings and AI financing

Apple beat fourth-quarter forecasts, with revenue of about $114.5 billion, up 12%, and earnings of $2.10 per share. On the call, it guided to 7% to 10% revenue growth in the December quarter but a gross margin of 45% to 46%, below the prior quarter’s guided range, as memory prices keep rising and Siri AI costs weigh. Apple also said it bought back $24 billion of shares and has received most of its tariff refunds. Palantir beat third-quarter estimates and lifted its full-year revenue outlook to around $8.53 billion.

Oracle is poised to price a $10 billion share sale at an 11% discount, according to reports, though the reference price for the discount was not immediately clear. The sale runs alongside a $10 billion bond offering. Blackstone President Jon Gray said more equity fundraising will be needed to meet AI demand. Pershing Square, in its quarterly letter, described hyperscaler spending as offensive rather than defensive investment. 

Reserve Bank of Australia Governor Bullock up soon. 

This article was written by Eamonn Sheridan at investinglive.com.