Australia

Australia shares are set to rise slightly as Wall Street moderated losses late in the trading session.

ASX futures were up 22 points at 6am on Tuesday, pointing to a slight rise at the open.

US stocks continued their retreat from late last night with the S&P 500 moving lower by 0.75% and the Nasdaq composite slipping 1.04%. This was the fourth session in a row that the US market closed lower.

The focus on the Federal Reserve continued in the US with Fed Vice Chairwoman Lael Brainard saying “Monetary policy will be restrictive for some time to ensure inflation moves back. It will take time for the cumulative effect of tighter monetary policy to work through the economy and to bring inflation down.”

Meanwhile in the UK the Bank of England continues their unsuccessfully attempts to hold back long-term bond yields. The yield on UK 30-year gilt rose sharply and end the trading day close to 4.7% even as the central band vowed to raise the ceiling on daily bond purchases and expand the types of collateral they accept from banks.

In commodity markets, Brent crude oil retreated 1.97% to US$95.99 a barrel with gold lower by 1.58% to US$1,667.79.

In local bond markets, the yield on Australian 1 year government bonds fell to 3.109% while the 10 year rose to 3.933%.

The Australian dollar continued its retreat to US63.02 cents.

Asia

Asian currencies continue to suffer against the greenback with the Yen hitting a 24 year low against the dollar. Hong Kong’s Hang Seng index fell 2.95% yesterday and closed down 523 points at 17,216.66 while the Nikkei fell 0.71% to close at 27,116.

After a holiday week, markets opened again in China with the Shanghai SE composite index retreating 1.66%.

Europe

The UK's Finance Minister Kwasi Kwarteng continued to struggle to calm markets with an announcement that he would bring forward a budget announcement to October 31st on longer-term tax and spending plans. Despite his efforts and continued actions by the Bank of England, investors continue to worry about unfunded tax cuts and the prospects of ballooning government debt. Government bond yields continued to rise while the FTSE 100 fell 0.35% to close at 6,959.31.

Meanwhile in Europe the DAX closed flat while the CAC 40 retreated 0.45%.

North America

US markets continued their slump with a fourth straight day of losses. The Dow Jones Industrial Average, S&P 500 and Nasdaq composite all retreated and fell 0.32%, 0.75% and 1.04% respectively. Continued volatility is expected as futures contracts on the VIX rose above 30. This measure of volatility is well above the long-term average of 20 which indicates that persistent volatility is expected by traders over the next few months.

Chip stocks weakened on export controls on semi-conductor exports to China. However, most investors are looking ahead to the next inflation data which will be released on Thursday and the kick-off of Q3 earnings season. PepsiCo reports on Wednesday and is followed by Delta Airlines and Blackrock on Thursday. The week closes with major financial institutions JP Morgan, Citigroup, Wells Fargo and Morgan Stanley reporting on Friday.