Crude oil continued to tick up, but not at Monday’s pace, with Brent a little over $85.
U.S. Treasury yields steadied after the previous day’s steep slide, which had been driven by recession-level readings for the Institute for Supply Management (ISM) survey. That helped the dollar find its feet as well.
Money markets lay 2:1 odds for the Fed to hike by another quarter point over a pause at their next meeting in a month from now. By contrast, the European Central Bank is seen as almost certain to tighten by a quarter point at its meeting around the same time.
The outlook could be tested later on Tuesday when Europe producer price figures and consumer inflation expectations are due.
The Reserve Bank of Australia, for its part, decided to press pause on its year-long rate hiking campaign – as most economists had predicted – amid signs that inflation may have peaked.
Meanwhile, there was some optimism from the Asian Development Bank in a report released on Tuesday, which upgraded its projection for the region’s growth this year on the strength of China’s post-COVID reopening.
Geopolitically though, China is a wild card, at the same time offering itself as a mediator in the Ukraine conflict while increasingly flexing its military muscle.
China has been for the first time keeping at least one nuclear-armed ballistic missile submarine constantly at sea, according to a Pentagon report.
On the spy balloons that flew over sensitive military sites earlier this year, the Pentagon said it could not confirm an NBC News report that they were transmitting data back to China in real time.
French president Emmanuel Macron will attempt to navigate those conflicting personas when he arrives in Beijing on Wednesday for an official visit.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/XQ2TEQVQTZKERMVXDFI3THSAYU.jpg "Markets exhale after OPEC+ shock; RBA hits pause 29")
