Global markets ignored weak manufacturing data to lift shares, crude oil and base metals in overnight trading. The US dollar slid again, and bonds came under modest pressure, following a relief rally in Hong Kong stocks on Monday. Alarming footage of sometimes violent US protests pushed concerns about fraying China/US relations into the background.

Manufacturing PMIs remain mired in contraction territory. The May reads showed the Eurozone went backward, although ISM data showed a slowing in the rate of contraction in North America. The exception is China, where manufacturing moved into expansion with a read of 50.7, just above the dividing line at 50. Metals traders looked through the weak numbers, lifting iron ore, copper and nickel in anticipation of increasing Chinese demand.

The Australian dollar briefly touched 68 US cents overnight, its highest level since mid-February. The strength comes ahead of this afternoon’s interest rate decision from the Reserve Bank of Australia. Analysts expect the cash rate will stay at 0.25%, and the accompanying statement will maintain a neutral tone.

Index futures indicate positive starts to trading in Australia, Singapore, Japan and Hong Kong. Local investors look willing to support further share market gains, despite reports that Chinese state owned enterprises were instructed to stop buying US agricultural goods, putting the phase-one trade deal at risk. The bullish sentiment seems at odds with an escalation in Sino-US tensions.