- US and European equity futures rose slightly, as investors awaited comments from Fed's Powell later Tuesday.
- As investors consider the prospects of the Fed maintaining a firm grip on monetary policy, a gauge of the region's equities rose around 0.7%, paring losses from the largest 2-day slump in 4 months.
- Some of the largest gains on Tuesday were in Hong Kong-listed tech stocks, which contrasted sharply with the drop in US equities on Monday, when the S&P 500 and the tech-heavy Nasdaq 100 both finished lower as bond yields increased. Baidu Inc. gained up to 13% after confirming plans to launch a ChatGPT-like bot in March.
- Treasuries recovered part of the 2-day rout caused by traders increasing expectations on future Fed tightening. The latest changes have dulled the shine of what has been the strongest start to a year for cross-asset gains since 1987.
- In Australia, the currency rose and bonds sank after the central bank hiked its benchmark rate to its highest level in 10 yr and stated that further hikes will be required in the coming months to combat inflation. The benchmark stock index in Australia reversed course and lost 0.4%.
- Investors are debating whether Fed's Powell will underline that expectations for rate reduction later in 2023 are likely overstated. Fed's Bostic stated on Monday that the strong jobs data released on Friday increased the potential that the central bank may need to hike interest rates to a higher peak than previously anticipated.
