Australia

Australian shares are set to edge higher as US stocks fell slightly in light trading following a three-day weekend.

ASX futures were up 10 points or 0.1% at 7506 as of 8.00am on Tuesday, suggesting a positive start to the shortened trading week.

The S&P 500 slipped 0.90 point, or less than 0.1%. The Dow Jones Industrial Average declined 39.54, or 0.1%. The technology-heavy Nasdaq Composite Index dropped 18.72, or 0.1%. All three indexes oscillated between small gains and losses in a lightly-traded session.

US bond markets tumbled again on Monday, continuing to reverse a brief rally notched early last week. The yield on the 10-year Treasury note gained to 2.861%, its highest closing level since December 2018. The benchmark yield has risen more than half a percentage point in April alone. Bond yields and prices move in opposite directions.

The rout in Treasurys is surprising because yields have already climbed to levels that look attractive to long-term investors like pension funds and foreign governments, said Jimmy Lim, founder of Modular Asset Management, a Singapore-based macro hedge fund.

"The inflation concern is real. There is a bit of a buyers' strike going on," he added.

Investors are watching the ongoing US reporting season for signs of how inflation is impacting corporate profits. Bank of America jumped on Monday after beating analyst profit forecasts. Troubled streaming giant Netflix reports on Tuesday (Wednesday morning AEST) followed by retail favourite Tesla the day after.

Separately, Ukrainian president Volodymyr Zelensky said Russia had commenced its long-awaited new offensive into the country’s eastern Donbas region in a late-night TV address on Monday (Tuesday morning AEST).

Locally, the S&P/ASX 200 closed 0.6% higher at 7523.4 last Thursday, before the four-day Easter weekend. The benchmark index ended the week up 0.6%, as latest data showed the jobless rate stayed steady.

Energy and technology stocks were standouts, both closing 1.3% higher, but financial stocks were a drag ending the day 0.3% lower.

Megaport rose 4.6%, while Xero gained 2.0%. Northern Star and James Hardie added 4.2% and 3.4% respectively.

Regional lender BOQ was the day's biggest loser falling 6.3% despite reporting a 38% uptick in half-year profit, and the major banks finished the day lower by between 0.1% and 0.7%.

In commodity markets, iron ore rose 0.7% to US153.85 per tonne; gold futures rose 0.6% to $1,986.40; Brent crude oil added 1% to US$ 112.84 as the shutdown of an oil field in Libya compounded concerns about an undersupplied market.

In bond markets, the yield on the Australian 10 Year bond edged down to 2.97%.

The Australian dollar was buying 73.50 US cents as of 8.00am, up from the previous close of 73.46. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, moved up to 93.13.

Asia

Chinese stocks ended mixed, as investors remained cautious despite the country's better-than-expected official 1Q GDP data. The benchmark Shanghai Composite Index fell 0.5% to settle at 3195.52, the only decliner among the three major indexes. The Shenzhen Composite Index was 0.4% higher at 2022.52, while the ChiNext Price Index rose 1.1% to 2487.77. Electronics makers, including semiconductor companies and telecom equipment suppliers were among the top gainers. But the momentum was offset by losses in property developers and property management firms.

Eric Khaw, a senior portfolio manager at Nikko Asset Management, said investors remain worried about the hit to China's economy due to extended lockdowns and supply-chain disruptions.

"China is facing one of the most serious economic challenges since the global financial crisis, and the root cause of it is the zero-Covid policy," he said.

Last Friday, China's central bank relaxed a key bank lending constraint, while leaving benchmark interest rates unchanged. Beijing hasn't "come out with enough policy response to offset the damage" to its economy in the first half of this year, said Dan Fineman, Credit Suisse's co-head of equity strategy for Asia Pacific.

Hong Kong shares ended higher as auto makers rose, supported by China's State Council saying it will support new-energy-vehicle consumption and lift car-purchasing limits, KGI Securities analysts say in a research note. Geely Automobile and BYD advanced 5.2% and 4.7%, respectively. Signals from Beijing pointing to a further easing of monetary policy are boosting wider market liquidity and supporting equity values, the analysts add. Other gainers included Haidilao, Country Garden Services and Li Ning, which rose 10%, 6.5% and 5.7%, respectively. The benchmark Hang Seng Index rose 0.7% to close at 21518.08.

Japanese shares ended lower, dragged by declines in chemical and food stocks, amid continuing concerns about higher costs of commodities and raw materials. Nippon Paint Holdings lost 4.0% and food company Ajinomoto dropped 3.1%. Meanwhile, Credit Saison jumped 21% after activist investor City Index Eleventh took a 5.1% stake in the credit card company. The Nikkei Stock Average fell 1.1% to 26799.71. Investors remained focused on the supply-chain disruption caused by the war in Ukraine and Covid-19 lockdowns in China.

Europe

European markets have been closed since Friday due to the Easter public holidays.

North America

US stocks edged lower to close Monday's session, while the 10-year Treasury yield continued its upward march following a three-day holiday weekend.

The S&P 500 slipped 0.90 point, or less than 0.1%. The Dow Jones Industrial Average declined 39.54, or 0.1%. The technology-heavy Nasdaq Composite Index dropped 18.72, or 0.1%. All three indexes wavered between small gains and losses throughout the day.

US government bonds tumbled again, sending the yield on the 10-year Treasury note to 2.861%, its highest closing level since December 2018. The benchmark yield has risen more than half a percentage point in April alone. Bond yields and prices move in opposite directions.

The rout in Treasurys is surprising because yields have already climbed to levels that look attractive to long-term investors like pension funds and foreign governments, said Jimmy Lim, founder of Modular Asset Management, a Singapore-based macro hedge fund.

"The inflation concern is real. There is a bit of a buyers' strike going on," he added.

Markets are pricing in more aggressive interest-rate increases in the coming months by the Federal Reserve, which is trying to bring down elevated consumer-price inflation without derailing economic growth.

Frances Cheung, a rates strategist at OCBC Bank, said investors see the Fed as "behind the curve" in dealing with inflation. Investors expect the central bank to raise rates by half a percentage point at each of its next two policy meetings in May and June, following a quarter percentage point increase in March that took its benchmark federal-funds rate to a range of between 0.25% and 0.5%.

Investors will be keeping a close eye on corporate earnings this week. Netflix is set to report on Tuesday, followed by investor darling Tesla on Wednesday. Other companies due to report financial results this week include Johnson & Johnson, Snap and United Airlines.

Corporate earnings will offer insight on how companies are grappling with inflation and which ones are best able to pass on price increases to customers, said Katie Nixon, chief investment officer for wealth management at Northern Trust.

"Pricing pressures are going to be pretty intense," Ms. Nixon said. "Everyone is going to be focused on how margins are affected."

Bank of America shares rose $1.28, or 3.4%, to $38.85 after the bank reported on Monday that its first-quarter profit beat analysts' forecasts. Shares of Charles Schwab tumbled $7.81, or 9.4%, to $74.94, making it the worst-performing stock in the S&P 500, after the brokerage's earnings missed expectations and trading activity fell compared with the same quarter a year ago.

Twitter shares jumped $3.37, or 7.5%, to $48.45. Speculation about an acquisition of the social-media company has persisted even after it adopted a so-called poison pill provision on Friday, making it more difficult for billionaire Elon Musk to increase his stake in the company. Last week Mr. Musk unveiled an unsolicited $43 billion bid to buy Twitter.

In commodities, futures on global benchmark Brent crude climbed 1.3% to settle at $113.16 a barrel as a shutdown of an oil field in Libya compounded concerns about an undersupplied market. Futures on the US benchmark, West Texas Intermediate, or WTI, advanced 1.2% to $108.21 per barrel.