Softer Michigan consumer sentiment figures but higher-than-expected inflation expectations failed to impact the US equity markets.
On Friday, the Nasdaq Composite Index rallied 2.05%, with the Dow and S&P 500 rising by 1.15% and 1.56%, respectively.
There were no economic indicators from the Asian calendar to influence the Monday session. Tech stocks were on the rise, tracking the Nasdaq gains from Friday. Hopes of a thawing in relations between the US and China drove demand for Hang Seng-listed stocks. US President Joe Biden and China Premier Xi Jinping meet this week.
Improved US-China relations could ease pressure on chip stocks, with the pullback in Treasury yields also a boon for tech stocks.
However, corporate earnings and a grim RBA economic outlook weighed on the ASX 200.
Pre-US CPI Report Nerves May Test Riskier Assets
On Monday, the US equity markets had a mixed session. The Dow gained 0.16%, while the Nasdaq Composite Index and S&P 500 fell by 0.22% and 0.08%.
10-year US Treasury yields eased back at the start of the week. A US consumer inflation expectations report showed a softer inflation outlook, albeit modestly down from 3.7% to 3.6%.
However, caution prevailed ahead of US inflation numbers on Tuesday.
The pullback in US Treasury yields and steady US equity market session will likely offer early support to the Asian equity markets.
However, corporate earnings need consideration, with business and consumer sentiment figures likely to affect ASX 200 trends.
Big names on the earnings calendar include Mitsubishi UFJ Financial Group (TYO: 8306), Sumitomo Mitsui Financial Group (TYO: 8316), Tencent Music Entertainment Group (HK: 1698), and Commonwealth Bank of Australia (ASX: CBA).
Futures Market Flashes Green
On Tuesday, the futures markets signaled a positive start to the session. The ASX 200 and the Nikkei were up 68 and 210 points, respectively.