Asian stocks advanced on Tuesday and the dollar steadied below a recent peak ahead of U.S. inflation data that some strategists said could offer another signal that inflation has peaked.
S&P 500 futures and Nasdaq futures held firm, while European stock futures dipped, setting the stage for a subdued start for European markets.
MSCI's broadest index of Asia-Pacific shares ex-Japan (.MIAPJ0000PUS) rose 0.8%, led by a 2.6% jump for South Korea's KOSPI (.KS11). Japan's Nikkei (.N225) put on 0.2%.
The MSCI gauge has risen for four days in a row, bouncing back from two-year lows.
Analysts, however, warned that U.S. core inflation is likely to march on and that the near-term rate implications are unclear.
"It's too early to be celebrating the end of inflation, as some market participants seem already to be doing," said ING economist Rob Carnell.
U.S. crude is hovering below $90 a barrel, down nearly 30% since the middle of June and roughly where it traded before Russia's invasion of Ukraine.
Interest rate futures imply a 90% chance that the Federal Reserve lifts its benchmark interest rate by 75 basis points at next week's policy meeting - a position that is perhaps most vulnerable to a downside CPI surprise.
"A further cooling in inflation would support the case for a step down in the pace of policy tightening to a 50 basis points rate hike at the FOMC meeting next week," said Kristina Clifton, a senior economist at CBA.
"Nevertheless, an upside surprise to inflation will easily cement market expectations of another outsized 75 basis points rate hike."
U.S. inflation figures are due at 1230 GMT and the consensus is for the core inflation rate last month to have risen 0.3% month-on-month, the same as in July.
