Australia

Australian shares are set to open sideways as a bump in crude oil prices boosted global oil stocks. Wall Street was closed for a public holiday. The Reserve Bank's interest rate decision is expected at 2.30pm.

ASX futures were up 1 point at 6538 as of 8.00am on Tuesday, pointing to little change at the open.

Futures tied to the S&P 500 slipped 0.5% while contracts on the tech-heavy Nasdaq-100 fell 0.6%. Dow Jones Industrial Average futures shed 0.3%. The pullback in futures suggested the US stock market, which is closed Monday for the Independence Day holiday, could come under renewed pressure Tuesday.

Investors are looking ahead to Friday's US jobs report for clues on how rising borrowing costs and inflation are affecting the labour market. Economists polled by The Wall Street Journal expect US employers to have added 250,000 jobs in June, down from a rate of 390,000 in May.

Sebastien Galy, senior macro strategist at Nordea Asset Management, expects markets to stay under pressure as investors haven't yet fully prepared for a growth slowdown.

"We're pricing in a very shallow recession," he said. "But the odds are it's not going be to shallow. It never is."

Locally, the S&P/ASX 200 closed 1.1% higher at 6612.6 on the eve of an interest-rate decision by the Reserve Bank, due at 2.30pm this afternoon.

All 11 sectors on the ASX 200 showed gains, as the benchmark index followed Friday's positive lead by US equities.

The energy sector led gains amid higher oil prices, although coal miner New Hope Corp. was the biggest gainer in percentage terms, jumping 7.8%. Whitehaven Coal rose 2.6% after it raised the cap on its on-market buyback.

Banks Commonwealth, NAB, ANZ and Westpac added between 0.8% and 1.3%, though the financial sector's gains were pared by weakness in shares of wealth managers.

Tech stocks rose, led by Block's 5.1% advance.

In commodity markets, Brent crude oil rose 1.7% to US$113.50. Iron ore declined 5.6% to US$109.90. Gold futures advanced 0.4% at US$1808.30.

In local markets yields fell slightly ahead of today’s Reserve Bank monetary policy decision. The yield on Australian 2 Year government bonds dipped to 2.41% while the 10 Year declined to 3.55%. US markets were closed for a public holiday. Yields fall when prices rise.

The Australian dollar rose to 68.66 US cents, up from 68.13 at the previous close. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies tracked upwards to 97.75.

Asia

China stocks ended the session higher, following a Friday recovery on Wall Street as US treasury yields retreated slightly, which typically triggers more buying interest in equities. The benchmark Shanghai Composite Index rose 0.5% to settle at 3405.43, while the Shenzhen Composite Index was up 1.2% at 2245.31. The tech-heavy ChiNext Price Index led the pack with a 1.9% rise to end at 2834.69. Agricultural companies, including hog producers, dairy-product makers and feed suppliers, were among the top gainers.

Hong Kong shares closed a tad lower, with the benchmark Hang Seng Index slipping 0.1% to 21830.35 as recession fears remain in focus. "The broader market narrative remains unchanged, with a slowdown in global manufacturing causing investors to re-examine views on stagflation versus recession," SPI Asset Management managing partner Stephen Innes says in a note. Futures tied to US equity indexes are also trading lower, adding to the negative sentiment. Declines were broad-based, led by Sunny Optical Technology's 6.6% fall. Country Garden Services lost 4.4%, Wharf Real Estate Investment retreated 4.0% and Shenzhou International fell 3.9%.

Japanese stocks ended higher, led by gains in power, tech and energy stocks, as concerns eased somewhat about the cost of borrowing. Tokyo Electric Power climbs 13% as recent hot weather and tight power supply continued to raise hopes for nuclear reactor restarts. M3 gained 3.9% and Mitsubishi Corp. advanced 4.0%. The Nikkei Stock Average rose 0.8% at 26153.81. Investors are focusing on movements of crude, bond yields and the yen.

Europe

European markets mostly rose, boosted by oil shares as crude prices advanced, though US markets remain closed for the Independence Day holiday. The Stoxx Europe 600 gained 0.5%, the French CAC 40 advanced 0.4%, and the German DAX dropped 0.3%.

Germany reported its first trade deficit since 1991 in May. Exports fell 0.5% while imports increased 2.7%, thanks in part to surging energy costs, according to data from the German statistics office.

London’s FTSE 100 rose Monday, prompted by strong gains from oil majors BP and Shell--two of the index's largest members. BP climbed 4.4% and Shell rose 3.9%, helping London's blue-chip index close 0.9% higher.

"A small bounce back in the oil price was enough to give BP and Shell a lift and provide welcome support to the FTSE 100 index," Russ Mould from AJ Bell said in a note. Harbour Energy, a smaller, U.K.-focused oil-and-gas producer which joined the ranks of the FTSE 100 in May, jumped 5.2%.

Shares in mining companies rose as well, with gold producer Endeavour up 3.9%. Copper peer Antofagasta, however, fell 1.3% as investors digested the impact of the recent tax reforms proposals in Chile.

North America

US stock futures edged down to start the week, while European stocks rallied, as investors continue to assess the odds of a global economic slowdown.

Futures tied to the S&P 500 slipped 0.5% while contracts on the tech-heavy Nasdaq-100 fell 0.6%. Dow Jones Industrial Average futures shed 0.3%.

The pullback in futures suggested the US stock market, which is closed Monday for the Independence Day holiday, could come under renewed pressure Tuesday.

The S&P 500 last week closed out its worst first half since 1970, and the index ended the week down 2.2%. Central banks have been raising interest rates to counter inflation, and investors are trying to gauge if the moves could lead economies into recession.

Investors are looking ahead to Friday's US jobs report for clues on how rising borrowing costs and inflation are affecting the labour market. Economists polled by The Wall Street Journal expect US employers to have added 250,000 jobs in June, down from a rate of 390,000 in May.

Sebastien Galy, senior macro strategist at Nordea Asset Management, expects markets to stay under pressure as investors haven't yet fully prepared for a growth slowdown.

"We're pricing in a very shallow recession," he said. "But the odds are it's not going be to shallow. It never is."

Factories around the world are reporting weakening demand for products. The development suggests that fervent demand for consumer goods during the pandemic boom could turn into a bust as surging prices and higher rates erode spending power. US household spending also slowed in May, the Commerce Department said last week.

US President Biden is expected to roll back some tariffs on Chinese imports as the administration seeks to rein in inflation, The Wall Street Journal reported. The decision, which could come this week, could pause tariffs on consumer goods such as clothing and school supplies, as well as launching a broad framework to allow importers to request tariff waivers.

Shares of American electric-vehicle maker Tesla that trade in Milan edged down 0.9% to 644.30 euros a share. On Saturday, the company said its quarter-over-quarter deliveries fell for the first time in more than two years after an extended shutdown of its largest factory in Shanghai.

Energy producers led gains Monday as oil prices rose. Oil-and-gas firm Harbour Energy added 4.3% in London trading, while BP rose 4.7% and Shell rose 4%. France's TotalEnergies also added 3.9%.