ASX up 6pc in October, best in 11 years

ASX 200 finished nearly 1.2 per cent higher, led by tech and consumer discretionary stocks. The market is up 6 per cent in October, the best in 11 years. Investors await RBA's rate news on Melbourne Cup. EML shares tank on UK regulatory woes. 

Investors are preparing for an increasingly likely 50 basis point rise when the Reserve Bank meets on Tuesday. Picture: Damian Shaw

Welcome to the Trading Day blog for Monday, October 31. The Aussie sharemarket closed nearly 1.2 per cent higher, with 10 of the 11 sectors in the black. Investors keenly await the Reserve Bank's rate decision on Tuesday.

The S&P/ASX 200 rose nearly 1.2 per cent to 6,863.5 on Monday.

On Tuesday, the RBA will meet to discuss monetary policy settings and while many economists predict a 25 basis point rise will be announced just before the Melbourne Cup is raced at Flemington, there are a growing chorus of experts now tipping a 50 basis point rise.

Optimism on the ASX follows a rally on Wall Street on Friday.

Wall Street closed higher with the S&P 500 index rising 2.9 per cent to 3901 points as the Nasdaq index jumped 2.9 per cent to 11,102 and the Dow Jones Industrial Average index was 2.5 per cent higher to 32,861 points.

US 10-year bond yields rose to 4.01 per cent, while two-year yields are higher at 4.41 per cent. Over the week, US 10-year yields fell by 21 points and US two-year yields fell by 7 points.

Oil prices are lower with global benchmark Brent crude falling 1.2 per cent to $US95.77 per barrel and the US Nymex is down 1.3 per cent to $US87.90 per barrel.

Iron ore futures rose 0.2 per cent to $US93.01 per tonne.

The Aussie dollar is near US64.10c.