Asian Markets Steady as Traders Await Rate Cuts, Earnings, and Key Data Releases

Asian markets steadied on Tuesday as traders awaited an expected rate cut by Australia's central bank and key earnings from Chinese companies. The Australian dollar hovered near a two-month high, with markets pricing in an 89% chance of a 25-basis-point cut. Japan's Nikkei rose 0.3%, while S&P 500 futures gained 0.2% and European futures remained flat.

Overnight, Europe's STOXX 600 index climbed 0.5%, driven by a 4.6% surge in defense and aerospace stocks, reaching record levels due to increased defense spending amid the Ukraine conflict. Investors anticipate strong earnings growth in the sector, labeled a "supercycle" by analysts. European banks also rose 1%, hitting 17-year highs amid rising bond yields.

French President Emmanuel Macron hosted an emergency summit on Ukraine, while Britain expressed readiness to send peacekeeping troops. U.S. and Russian officials prepared for talks in Saudi Arabia, though Ukraine's President Zelenskiy rejected any decisions made without Ukraine's involvement.

Chinese markets rose after President Xi Jinping met with business leaders, though Baidu shares steadied after a previous slide. BHP shares rose 0.6% despite reporting its lowest first-half profit in six years, citing signs of China's economic recovery. Alibaba will report earnings later this week.

The euro hovered below $1.05, the yen was firm at 151.74, and the pound traded near a two-month high at $1.26033. Gold eased from record highs at $2,895 an ounce, while Brent crude held steady at $75.16. OPEC+ is considering delaying supply increases despite calls from former U.S. President Trump to lower prices. Key global business activity data and German elections are also in focus this week.