Australia

Australian shares are expected to climb today. All three major US indices gained Monday as investors hoped that the January CPI report, set to be released today, will show signs of cooling inflation.

ASX futures were pointing 0.55% higher at 7391 as of 8:00am on Tuesday, pointing to a rise at the open.

US stocks leaped Monday, as investors awaited inflation data due later this week that would feed into their assessments of where monetary policy is headed.

The S&P 500 and the Dow Jones Industrial Average both rose 1.1% while the Nasdaq Composite jumped 1.5%.

The Labor Department is set to release January's consumer-price index reading later today, a closely watched measure of what consumers pay for goods and services. Stocks have gained this year, with the S&P 500 up 6.5% as of Friday. Investors broadly expect inflation to continue moderating, though some are wary that inflation could settle above the Federal Reserve's target.

In commodity markets, Brent crude oil was down 0.19% at $US86.23 a barrel while gold dropped 0.72% to US$1,852.08.

The yield on Australian 2 Year government bonds increased to 3.44% while the yield on 10 Year bonds rose to 3.75%. US Treasury notes also gained, with the 2 Year yield climbing to 4.53% and the 10 Year yield reaching 3.72%.

The Australian dollar jumped to 69.60 US cents from its previous close of 69.15. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, edged down to 96.24.

Asia

Chinese stocks ended higher, showing signs of improvement from the market's muted trading pattern last week. The benchmark Shanghai Composite Index rose 0.7% to settle at 3284.16, while the Shenzhen Composite Index grew 1.2% to 2190.54. The ChiNext Price Index was up 1.1% to end at 2573.18. Machinery and heavy equipment makers led gains, as investors looked forward to an expected construction-activity rebound amid more policy support for the property sector. Sany Heavy Industry rose 10% while Zoomlion Heavy jumped 6.4%.

Hong Kong's Hang Seng Index ended 0.1% lower at 21164.42, paring earlier losses as bargain-hunting investors swooped in, seeing opportunity amid hopes that China's economic recovery will continue. Tech stocks and consumer companies led the gainers in afternoon trade. The Hang Seng Tech Index rose 0.3%, reversing from a 1.7% drop at the open. Among tech stocks, Baidu added 1.9% and Tencent gained 0.8%. Restaurant giant Haidilao climbed 4.7%. Link Real Investment Trust was the biggest loser on the HSI, dropping 13% after announcing a plan for a US$2.5 billion rights issue.

The Japanese Nikkei Stock Average ended 0.9% lower at 27427.32, tracking broad declines among other Asian equities amid worries over the global economic outlook and policy tightening by central banks. Stocks of precision instrument makers fell, with Hoya falling 2.7%, Terumo declining 1.2% and Nikon dropping 3.6%. Nissan Motor rose 0.6% after the company said it will invest alongside French auto maker Renault to produce six new vehicle models in India for about $600 million. Cosmetics company Shiseido Co. fell 4.0% after it posted a drop in its 2022 net profit.

India's benchmark Sensex index closed 0.4% lower at 60431.84 amid losses in financial and tech stocks. Adani Group stocks continued their decline. Losers included State Bank of India, which was 2.8% lower; Infosys, which fell 2.5%; and Tata Consultancy Services, which was down 1.5%. Among Adani Group stocks, flagship company Adani Enterprises fell 7.0% and Adani Green Energy dropped 5.0%, following a report that the conglomerate has cut its revenue growth target in half and after Moody's Investors Service downgraded some of the group's companies to 'negative' from 'stable.'

Europe

European stocks rose as investors remained upbeat ahead of potentially significant inflation data later in the week. The pan-European Stoxx Europe 600 gained 0.9%, the French CAC 40 advanced 1.1%, and the German DAX climbed 0.6%. In London, the FTSE 100 increased 0.8% to 7947, just shy of an all-time intraday high of 7949 reached last week.

"While the world keeps a nervous eye on the game of tit-for-tat balloon shootdowns between the US and China, stocks have moved higher, but all the moves today feel like a placeholder ahead of tomorrow's CPI figures," IG analyst Chris Beauchamp wrote. "These have the potential to shift the narrative dramatically."

North America

US stocks leaped Monday, as investors awaited inflation data due later this week that would feed into their assessments of where monetary policy is headed.

The S&P 500 and the Dow Jones Industrial Average both rose 1.1% while the Nasdaq Composite jumped 1.5%.

The Labor Department is set to release January's consumer-price index reading later today, a closely watched measure of what consumers pay for goods and services. Stocks have gained this year, with the S&P 500 up 6.5% as of Friday. Investors broadly expect inflation to continue moderating, though some are wary that inflation could settle above the Federal Reserve's target.

"The key thing here is at what level will inflation begin to stabilize," said Peter Garnry, head of equity strategy at Saxo Bank. "If these inflationary factors are persistent, then the Fed will be in a position where they have to do more or keep rates up longer than the market is pricing."

Higher interest rates typically hurt stocks as investors can buy safer assets, such as Treasury bonds, for returns. The effect is particularly felt by technology stocks, whose value is heavily dependent on expected growth, since higher interest rates make future profits appear less valuable in today's money.

While the busiest phase of fourth-quarter earnings season is over, several big companies, including AIG, Airbnb, Applied Materials, Cisco Systems, Coca-Cola and Kraft Heinz, are due to report later this week.

So far this year, a higher-than-usual share of companies have missed consensus sales and profit forecasts, according to FactSet. Overall, quarterly profits are set to fall 4.9% year-over-year, marking the first such shrinkage since 2020, its analysis shows.

Gains were broad-based Monday, with every S&P 500 sector except energy trading higher. The trading was a rebound from the S&P 500's 1.1% decline last week, its first weekly drop of the year.

Payments giant Fidelity National Information Services was the worst performer in the S&P 500 Monday, tumbling 14% after it said it plans to spin off its merchant business, essentially undoing a $43 billion acquisition it made in 2019. Biotechnology company Illumina was the best performer in the broad-based index, with shares rising 7.6%.