- Stocks in Asia and US equity futures extended gains after a rally in US stocks triggered risk-on sentiment and weak manufacturing data quelled fears of more aggressive Fed rate hikes.
- An Asia-Pacific equity benchmark rose more than 1.6%, fueled by a broad rebound in the region, as investors appeared to shrug off news that North Korea fired a missile over Japan for the first time since 2017.
- Following the S&P 500's best day since July, US equity futures edged higher. Treasuries consolidated after a Monday rally, as a US manufacturing gauge fell more than expected.
- Traders reduced their bets on Fed rate hikes, with swaps tied to Fed policy meeting dates in early 2023 falling sharply. The rate on the March meeting contract fell, implying a peak policy rate of 4.45% next year, down from recent highs above 4.60%. The dollar dropped.
- Oil rose after posting its biggest one-day gain since May, as the market expected OPEC+ to cut supply significantly.
