By John McCrank
NEW YORK (Reuters) - Asian markets looked set to rise on Tuesday as investors weighed growing expectations of an economic rebound in China and a resurgent U.S. services industry, brushing off worries about a spike in U.S. coronavirus cases.
Australian S&P/ASX 200 futures
Bullish sentiment toward the Chinese economy propelled the yuan on Monday to its best day against the dollar since December, while an index of blue-chip Chinese shares (CSI300) soared to its highest in five years.
Jawboning by the Chinese government through a state-sponsored journal on the importance of "fostering a healthy bull market" helped spur the move, said Ray Attrill, head of FX strategy at NAB, in a research note.
"Shades of John F. Kennedy's 'Ask not what your country can do for you' inauguration speech here and as close as you might get to a Chinese government 'put' as anything the Fed has done to date vis-à-vis the U.S. stock (and credit) markets," he said in his description of the Chinese report.
Stocks also rallied on a sharp rebound in U.S. services industry activity in June, almost returning to pre-pandemic levels, even as new coronavirus cases surged in several states, forcing some restaurants and bars to close again in a setback to the budding recovery.
On Wall Street, the Dow Jones Industrial Average (DJI) rose 1.78%, the S&P 500 (SPX) gained 1.59% and the Nasdaq Composite (IXIC) 2.21%.
Emerging market stocks rose 2.65% while MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) closed 2.46% higher on Monday.
The Reserve Bank of Australia is expected to hold its cash rate at 0.25% and make no changes to policy at Tuesday's board meeting, leaving markets to focus on the accompanying statement. There will be particular attention on whether the central bank notes the Australian dollar's rise.
The Australian currency was up 0.04% versus the greenback at $0.698.
Gold edged toward an almost eight-year high hit last week as the spike in coronavirus cases kept safety demand elevated, although the rally in stocks and strong U.S. services sector data limited the metal's advance.
U.S. gold futures
Brent crude (LCOc1) settled up 30 cents at $43.10 a barrel, while U.S. West Texas Intermediate crude (CLc1) fell 2 cents to settle at $40.63.