Global equities were mixed overnight as investors digested Chinese tax cuts and lower growth forecasts while awaiting for details on a possible trade deal.
U.S. Treasuries were steady while the dollar edged a tad higher for a fifth consecutive session.
At China's National People's Congress, authorities lowered its 2019 economic growth target to a range of 6.0-6.5 percent amid rising concerns over a downturn in the world's second largest economy and will aim for consumer inflation of 3 percent this year and a fiscal deficit of 2.8 percent.
In commodities, gold has slid for a seventh consecutive session, its longest slump in two-years, while crude oil prices creeped a tad lower.
Reserve Bank of Australia Governor Philip Lowe will give a speech on the housing market Wednesday, and the Bank of Canada is expected to keep rates on hold due to uncertainty on housing and investment.
With all this in mind, here are five things the global markets were talking about on Tuesday.
1. Global Bourses Post Mixed Results
In Japan, the Nikkei eased from its three-month peak as chip and machinery firms slid and China cut its economic growth target, hurting companies with large exposures to the world's second largest economy. The index ended 0.4 percent lower, while the broader Topix dropped 0.5 percent.
Down-under, Aussie shares ended lower overnight, but trimmed deeper losses, after the RBA signalled a steady policy outlook and China said it would introduce further measures to aid its cooling economy. The S&P/ASX 200 index finished down 0.3 percent after rallying 0.4 percent on Monday. In Korea, the Kospi stock index fell for a third consecutive session.
In China, stocks rallied overnight after Beijing unveiled plans to cut taxes and increase public expenditure and lending to support a slowing economy. At the close, the Shanghai Composite index was up 0.9 percent, while the blue-chip CSI300 index rose 0.6 percent.
In Hong Kong, the equity market was little changed. At the close of trade, the Hang Seng index was flat, while the Hang Seng China Enterprises index rose less than 0.1 percent.
2. Oil Falls As Libya's Largest Field Restarts
Oil prices moved lower, pressured by the restart of Libya's biggest oilfield and on expectations for an increase in U.S crude stocks.
Brent crude fell to $65.05 a barrel, while U.S West Texas Intermediate crude slipped to $56.15.
An increase in production will always worry crude oil bulls. At Libya's El Sharara oilfield, a number of wells have restarted, and the aim is to reach initial output of 80K bpd. The field had been closed since December.
Oil is also trading under pressure on market expectations that the latest round of U.S. inventory reports this week will show rising crude stockpiles. A number of analysts expect crude stocks rose 400K barrels in the week ending March 1.
Stateside, there are signs that the oil production boom, which has seen crude output rise by more than 2M bpd since early 2018 to more than 12M bpd, may slow down. U.S. energy firms last week cut the number of oil rigs looking for new reserves to the lowest in almost nine months. Some producers are looking to cut back on spending.
3. RBA Did As Expected (Nothing)
The Reserve Bank of Australia left its Cash Rate Target unchanged at 1.50 percent. There were no notable changes in language from Governor Lowe and maintained its GDP and inflation outlooks. He reiterated the view that "low level of interest rates was continuing to support the domestic economy" and that that "inflation remained low and stable."
Governor Lowe will speak on Wednesday, just prior to the Q4 GDP release, on the biggest economic issue in the country–the impact of a weak housing market on Australia as a whole. Lowe is likely to point to the danger of "falling confidence" and "the probability of interest-rate cuts if ongoing home-price declines become disorderly.
4. Dollar In Demand
A rise in eurozone retail sales is failing to lift a falling euro. Data released on Tuesday shows January retail sales rose 1.3 percent compared with a fall of 1.4 percent in December, in line with consensus.
The data is unlikely to change the tone of this week's ECB meeting on Thursday. The ECB is expected to sound "cautious" and moreover, the dollar remains strong and Friday's NFP release is expected to confirm investors' reasons to stay long.
GBP/USD is steady atop of £1.3150-60 area. Brexit Secretary Barclay and Attorney General Cox are meeting with EU officials today in efforts to secure a legally binding change to the Irish backstop, but expectations are low to none. Market expectations are leaning towards the Brexit deadline being extended or passage of Prime Minister Theresa May's deal by parliament.
USD/CHF was a tad higher, up 0.2 percent and back above parity as inflation was still largely absent in Switzerland. The Swiss National Bank is in "no hurry" to exit its negative rate policy.
5. Rise In U.K. Services PMI Lifts The Pound
The pound rallied briefly after Tuesday morning's purchasing managers' survey on U.K. services sector activity unexpectedly rose to 51.3 in February from 50.1 in January. Market expectations were expecting a fall to 49.
According to HIS Markit, last month there was a "modest" upturn in output, however, new work fell slightly and staffing levels dropped to "greatest extent for over seven years."
Brexit-related uncertainty "remained by far the most prominent factor acting as a brake on business activity growth in February," it said, "even in the case of Prime Minister Theresa May's deal going through."
Other data showed consumers reined in their spending in February and shoppers focused on buying food, including for stockpiling, rather than non-essential items.
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