Asian markets were poised to follow Wall Street's firm lead on Tuesday as the sentiment boost from upbeat U.S. data outweighed the threat of rising COVID-19 infections in the world's largest economy.
Investors cheered strong U.S. housing data that showed a bounce back in home sales, and are anticipating positive jobs data later this week as the U.S. jobs numbers are expected to tick up as people head back to work.
"Overnight moves in markets were not large but one does get the distinct impression that markets have got it both ways â€“ with equities rallying on rebounding data and bonds rallying on dismal COVID-19 news," said ANZ Research analyst Rahul Khare.
Australian S&P/ASX 200 futures rose 1.15% while Japan's Nikkei 225 futures ticked up 0.11%. Hong Kong's Hang Seng index futures climbed 0.62%.
In Asia, investor focus will be on China's official purchasing managers' index (PMI), which is expected to show factory activity grew for a fourth straight month in June albeit at a slower pace, raising concerns the recovery in the world's second-largest economy may be stalling.
A recent resurgence in coronavirus infections had caused some investors to doubt the strength of a rebound in global economic activity.
However, gains in equities, long-term yields, and oil futures suggest the majority of investors remain optimistic about the long-term prospects for growth.
Confirmed COVID-19 cases worldwide rose past 10 million and deaths surpassed 500,000 on over the weekend. The bulk of new cases were reported in the United States and Latin America, stoking fears that the outbreak could stall economic recoveries just as lockdowns begin to ease.
MSCI's gauge of stocks across the globe rose 0.72% during Monday trading fueled by gains on Wall Street. On Monday, the Dow Jones Industrial Average rose 2.32%, the S&P 500 gained 1.47% and the Nasdaq Composite added 1.2%.
U.S. Treasuries were little changed after Monday trading as the intervention by the Federal Reserve Bank kept yields stable.
In currency markets, the dollar held onto gains against the yen and the Swiss franc as the recent increase in coronavirus cases supported safe-haven demand for the greenback.
China's yuan held steady at 7.0752 per dollar in the offshore market as traders braced for China's PMI.
In oil markets, Brent crude contracts were unchanged at $41.71 per barrel.