- On hopes that the Federal Reserve will pause its most aggressive tightening campaign in decades, an indicator of Asian markets gained alongside US and European futures.
- Once the PBoC cut its short-term policy interest rate to help the economy, the offshore yuan fell and Chinese bond yields fell. The reduction in the seven-day reverse repurchase rate comes ahead of the PBoC's much-anticipated monthly operation for its medium-term lending facility on Thursday.
- Japan's Topix index surged for a third day, extending advances that had lifted the index to its highest level since 1990, while South Korean shares also advanced. Australia's benchmark recovered a tiny loss, but Hong Kong stocks dipped and Shanghai stocks varied.
- When the Nasdaq 100 and S&P 500 ended at its highest levels since April 2022, contracts for US benchmarks climbed marginally in Asia. Increases in the Nasdaq, which jumped 1.8% overnight, will focus attention on Asian technology companies.
- The 2-yr US Treasury yield, which is sensitive to upcoming central bank movements, fell for the second day in a row.
- On Wednesday, the Federal Open Market Committee is expected to keep interest rates in the 5%-5.25% range. This assumes that consumer price index data released later Tuesday reflect moderate inflationary pressure. The possibility of a raise has increased in July, with swaps pricing in nearly a quarter-point further tightening by next month's meeting.
