Futures pointed to gains for equities in Tokyo, Shanghai and Hong Kong after the S&P 500 Index climbed for a second day.
The 10-year Treasury yield was little changed as Federal Reserve Vice Chairman Richard Clarida backed gradual rate hikes ahead of Jerome Powell’s speech on Wednesday.
The euro slipped after a report that US President Donald Trump may impose tariffs on European cars as early as next week.
Trump is open to a deal with China but is ready to impose more tariffs if the upcoming talks don’t yield progress, Larry Kudlow, Trump’s top economic adviser, told reporters Tuesday ahead of the president’s meeting with his counterpart Xi Jinping in Argentina this week.
The debate on the pace of monetary policy tightening in the US next year has intensified this week ahead of Powell’s speech that will be parsed for any hints on prospects for a pause in rate increases next year.
Clarida said risks to the US economy are “less skewed to the downside,” while St. Louis Fed President James Bullard was more cautious, telling Reuters that officials must monitor possible “cracks” in the US recovery and that growth is going to slow in 2019 and 2020.
“All eyes are going to be on Powell, to hear what his language sounds like,” Emily Roland, Boston-based head of capital markets research at John Hancock Investments, told Bloomberg TV. If the Fed “puts the brakes on here in 2019, that could put meaningful pressure on markets.”
Elsewhere, emerging market shares climbed. Bitcoin steadied around US$3,700 (RM15,515.91) after plunging 14% Monday.
Oil in the US climbed back above US$52 a barrel.