Australian Market

Australia’s S&P/ASX 200 index jumped 3.7% after the Reserve Bank of Australia took its foot off the accelerator and slowed the pace of interest-rate increases. Financial stocks shot up by 4.1%, with the major banks adding between 4.3% and 5.0%.

US Market 

U.S. stocks jumped again, extending a strong start to the fourth quarter and giving relief to investors after weeks of punishing losses. The Dow Jones Industrial Average advanced 2.8%. The S&P 500 surged 3.1%, and the technology-heavy Nasdaq Composite climbed 3.3%. New data from the Labor Department showed that U.S. job openings fell by 10% in August and layoffs rose slightly, signs that the labor market is starting to cool. While bad news for workers, such a slowdown could help reduce inflation and ease pressure on the Fed to keep lifting rates.

“If that trend continues, then the Fed will maybe start to pull off a little bit, in terms of the last few hikes that are priced into the market between now and early next year,” said Jack Janasiewicz, a portfolio manager at Natixis Investment Managers Solutions.

Commodities

Gold futures settled at their highest price in about three weeks, while silver ended at its highest level since June, as precious metals added to their strong gains from the prior session. Gold futures for December delivery advanced 1.7% to settle at $1,730.50 per ounce on Comex, the highest finish for a most-active contract since Sept. 12, FactSet data show.

Silver futures for December delivery climbed 2.5% to $21.099 per ounce. “Gold has kicked off the final quarter of 2022 on a positive note, thanks to a softer dollar and subdued Treasury yields,” said Lukman Otunuga, manager, market analysis at FXTM.

Market speculation around the Fed “adopting a less aggressive approach on rate hikes has also sweetened the appetite for zero-yielding gold,” he said. “While prices may push higher over the next few days, the metal’s outlook will be influenced by the U.S. jobs report on Friday,” said Otunuga.

Oil Futures

Oil futures rose, with U.S. prices settling at their highest in almost three weeks, a day ahead of a meeting of the Organization of the Petroleum Exporting Countries and their allies, where producers are expected to consider a large production cut. West Texas Intermediate crude for November delivery rose 3.5% to settle at $86.52 a barrel on the New York Mercantile Exchange. December Brent crude gained 3.3% to end at $91.80 a barrel on ICE Futures Europe.

“An empirical approach to the present fundamentals leads us to believe benchmark WTI should be trading in the $75-$80 range, although the current unpredictability within the market brings a warranted volatility premium,” said Harry Altham, energy analyst, EMEA & Asia for StoneX Group. “It therefore stands to reason that OPEC+, while analyzing the market ahead of the decision, will see an output cut as being justified within current market conditions.”

Forex

European sharemarkets lifted on Tuesday on hopes that central banks will ease the pace of future rate hikes as they attempt to bring inflation under control. Euro-zone producer prices rose by 5% in August, close to market expectations. Travel & leisure stocks rose by 6.2% with technology stocks up by 5.1%, boosted by gains in chipmakers. The continent-wide FTSEurofirst 300 index rose by 3.2%. The UK FTSE 100 index gained 2.6% higher.

European Markets

Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$0.9825 to highs near US$0.9990 and was near session highs at the US close. The Aussie dollar fell from highs near US65.45 cents to lows near US64.50 cents and was near US65 cents at the US close. And the Japanese yen rose from near 144.91 yen per US dollar to JPY143.95 and was near JPY144.00 at the US close.

Asian Markets

Earlier Tuesday, Japanese stocks were led higher by sharp gains in trading houses, as some signs of a cooling U.S. economy raised hopes the Fed may slow the pace of tightening. Itochu surged 8.3% after it boosted its fiscal-year earnings guidance and announced a share buyback plan. The Nikkei Stock Average rose 3.0%.