A look at the day ahead from Sujata Rao.
After commodities, tech giants and online tutoring, are video games coming into Chinese regulators' crosshairs?
A Chinese state media outlet branding online games "spiritual opium" was enough to send shares in Tencent tumbling 10%, the biggest daily fall in a decade. Panic is engulfing rivals such as NetEase, XD and GMGE .
Wall Street futures still hint at a stronger open and European bourses are seesawing around flat but fears are palapable of another Chinese regulatory assault -- one that coincides with a resurgence of COVID-19 caseloads worldwide and signs the growth rebound has peaked.
Central banks, for now at least, show no signs the shifting narrative is forcing them off the tapering path.
The Reserve Bank of Australia on Tuesday stuck to plans to reduce bond-buying by A$1 billion a week from next month, even though swathes of Australia are under lockdown.
While the Federal Reserve and its boss Jay Powell have struck a dovish note, there is clearly dissent. Governor Christopher Waller for instance said support for the economy could be reduced by October if the next two monthly jobs reports each show employment rising by more than 800,000.
On markets, the Australian dollar jumped half a percent versus the U.S. dollar after the RBA showed it was not yet for turning. The U.S. currency remains just off one-month lows.
A report from the Institute for Supply Management on Monday showing July U.S. manufacturing growth slowed for the second straight month was enough to drive another lurch lower in global bond yields, led by a five basis-point fall in 10-year U.S. borrowing costs to 1.1510%.
The moves also took German 30-year yields back below zero for the first time in six months.
But if bond markets are painting an increasingly dire picture of future growth, there is no sign of that on world stocks which remain a whisker off record highs. And if second-quarter earnings mark a peak, it's a pretty high one, with growth running at 90% to 120% year-on-year.
Dealmaking continues too -- Sanofi has agreed to buy U.S. biotech Translate Bio in a $3.2 billion deal.
Key developments that should provide more direction to markets on Tuesday:
- Standard Chartered reported a 57% jump in H1 profit and $350 million worth of shareholder payouts - BP to increase dividend by 4% and up share buybacks after Q2 profit rose to $2.8 billion - Euro zone PPI - U.S. factory orders - Fed speakers: Board governor Michelle Bowman - U.S. earnings: DuPont, Sunoco, Eli Lilli, Chlorox, Alibaba, Conoco Group, Marriott, Allegheny, Cummins, Ralph Lauren, - European earnings: BMW, BP, Generali, Poste Italiane, Societe Generale, Stanchart, Stellantis,
(Reporting by Sujata Rao; Editing by Tommy Wilkes)