(Bloomberg) — A rally in global markets extended into a second day, lifting US index futures and European stocks, as investors wagered central banks may slow the pace of monetary tightening.

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Futures on the S&P 500 and Nasdaq 100 jumped at least 1.2% each after the underlying indexes posted a strong start to the quarter on Monday. Europe’s Stoxx 600 gauge rose for a third day. The Australian dollar briefly fell after policymakers raised interest rates by less than forecast. Oil advanced on expectations the OPEC+ alliance will deliver a substantial supply cut. The dollar and Treasury yields declined for a second day.

Investors see weaker-than-estimated US manufacturing data supporting a dovish tilt at the Federal Reserve after 3 percentage points of hikes began to tell on the economy. Money markets now see the Fed Funds Rate peaking below 4.5% by March. Speculation is growing that the global wave of disruptive monetary tightening is closer to its end, after the Reserve Bank of Australia raised rates by half as much as expected.

“While the more rational approach outlined by the RBA does not bring forward rate cuts, it offers the possibility of stepping back from the more extreme hawkishness of recent weeks,” Stephen Innes, managing partner at SPI Asset Management, wrote in a note. “That implies bull steepening in bond markets and should provide some support for equity markets if other central banks follow suit.”

Money markets signal the Fed will hike rates a further 125 basis points at most by March compared with as much as 165 basis points seen following the third three-quarter point increase last month. These pared expectations spurred a rally in Treasuries across the curve on Tuesday. The 10-year rate shed 6 basis points Tuesday, while the two-year yield fell twice as many basis points, sliding below the 4% mark.

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Still, Fed speakers continued the drumbeat over rate hikes. New York Fed President John Williams said this week the US central bank has yet to raise interest rates to levels that are restricting economic growth, and tightening still has “significant” ways to go.

The dollar headed for the lowest level since Sept. 22, with a rebounding British pound acting as the biggest drag. The UK’s withdrawal of a tax-cut plan soothed nerves about the government’s fiscal health, though doubts remained about the outlook for the currency.

West Texas Intermediate rose to $84 a barrel after rallying by more than 5% on Monday. The Organization of Petroleum Exporting Countries and its allies including Russia will consider reducing output by more than 1 million barrels a day when they meet on Wednesday, according to delegates.

The MSCI Asia Pacific Index rallied more than 2% to head for its highest in a week, sparked by a broad rebound in the region. Japan’s Topix stock benchmark jumped more than 3%, boosted by technology shares.

China’s onshore markets will remain shut this week for holidays, while the Hong Kong exchange is closed Tuesday for the Chung Yeung Festival.

Key events this week:

• Eurozone PPI, Tuesday

• US factory orders, durable goods, Tuesday

• Fed’s John Williams, Lorie Logan, Loretta Mester, Mary Daly speak at events, Tuesday

• Eurozone services PMIs, Wednesday

• OPEC+ meeting begins, Wednesday

• Fed’s Raphael Bostic speaks, Wednesday

• The Reserve Bank of New Zealand meets, Wednesday

• Eurozone retail sales, Thursday

• US initial jobless claims, Thursday

• Fed’s Charles Evans, Lisa Cook, Loretta Mester speak at events, Thursday

• US unemployment, wholesale inventories, nonfarm payrolls, Friday

• BOE Deputy Governor Dave Ramsden speaks at event, Friday

• Fed’s John Williams speaks at event, Friday

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Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 1.2% as of 8:07 a.m. London time

• Futures on the S&P 500 rose 1.2%

• Futures on the Nasdaq 100 rose 1.5%

• Futures on the Dow Jones Industrial Average rose 1.1%

• The MSCI Asia Pacific Index rose 2.3%

• The MSCI Emerging Markets Index rose 1.5%

Currencies

• The Bloomberg Dollar Spot Index fell 0.4%

• The euro rose 0.5% to $0.9880

• The Japanese yen fell 0.1% to 144.71 per dollar

• The offshore yuan rose 0.7% to 7.0527 per dollar

• The British pound rose 0.6% to $1.1386

Cryptocurrencies

• Bitcoin rose 1.5% to $19,894.1

• Ether rose 1.3% to $1,340.63

Bonds

• The yield on 10-year Treasuries declined four basis points to 3.60%

• Germany’s 10-year yield declined four basis points to 1.88%

• Britain’s 10-year yield declined three basis points to 3.93%

Commodities

• Brent crude rose 0.9% to $89.67 a barrel

• Spot gold rose 0.4% to $1,707.41 an ounce

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