US stocks surged on Tuesday, attempting to rebound from a big sell-off the day before which saw the Dow having its worst session since July 19th and the S&P 500 and the Nasdaq suffering their biggest daily drop since May. Worries over the potential contagion over a default by the Chinese giant Evergrande eased somewhat. The company is due to pay out interest on $300 billion of liabilities on Thursday only. Meanwhile, traders await the FOMC meeting to start today but the outcome is due tomorrow. On the corporate front, shares of Uber were in the green as the company revised its outlook higher.

European shares rose more than 1% on Tuesday, extending early gains and recovering from a sharp decline on Monday that sent major indexes to multi-month lows. Investors welcomed the OECD's economic outlook report showing the Euro Area economy will likely grow 5.3% this year, faster than a 4.3% expansion projected in May. At the same time, travel-related stocks jumped following the relaxation of US travel curbs, while worries about the future of embattled developer China Evergrande Group continued even as traders bet Beijing will not let the crisis spiral out of control. Investors also awaited the Federal Reserve's meeting outcome on Wednesday as it is expected to step closer to tapering. On the corporate front, Universal Music Group surged 38% in its first day of trading, giving it a market capitalization of more than €46 billion.

The world economy is expected to grow by 5.7 percent this year, little-changed from a 5.8 percent expansion projected in May, supported by the vaccine roll-out and a gradual resumption of economic activity, the Organization for Economic Cooperation and Development's latest economic outlook report showed. Still, the Paris-based policy forum said that the recovery remained uneven and that it was too early for governments and central banks to withdraw exceptional support for their economies despite growing inflationary pressure. The US GDP is seen rising by 6.0 percent in 2021 (vs 6.9 percent projected in May), while the Eurozone should advance by 5.3 percent (vs 4.3 percent). China will probably grow by 8.5 percent (the same as projected in May), Japan by 2.5 percent (vs 2.6 percent) and India by 9.7 percent in the 2021-22 fiscal year (vs 9.9 percent).

WTI crude futures were up around 1% to near $71 a barrel on Tuesday, after surging more than 2% early in the session, and after falling around 2% on Monday, due to worries over tighter US supplies after hurricane Ida and storm Nicholas. Royal Dutch Shell, the largest US Gulf of Mexico oil producer, said the damage to offshore transfer facilities from Hurricane Ida will cut production into early next year. About 18% of the US Gulf's oil and 27% of its natural gas production remained offline on Monday.

Prices of new homes in Canada went up by 0.7% from the previous month in August of 2021, picking up momentum again after showing signs of slowing for three months in a row. New house prices were up in 13 of the 27 census metropolitan areas surveyed, led by London (+3.9%) amid supply shortages. Among Canada’s most expensive metropolitan areas, prices rose faster in Toronto (+0.8%) than in Vancouver (+0.5%) and Calgary (+0.2%). On an annual basis, new house prices jumped 12.2% in August, one of the steepest increases on record, continuing an upward trend that began in December of 2020.

The current account gap in the US widened to $190 billion, or 3.3% of the GDP in the second quarter of 2021 from a downwardly revised $89 billion in the prior period and compared to forecasts of a $191 billion shortfall. It is the highest current account deficit since the Q2 of 2007, mainly reflecting reduced surpluses on services and on primary income that were mostly offset by a reduced deficit on secondary income. The services surplus shrank to $61 billion from $63 billion in Q1 amid higher demand for sea freight and air passenger transport and other personal travel; and the primary income surplus also fell slightly to $49 billion from $50 billion. Also, the secondary income gap narrowed to $31 billion from $34 billion, with decreases in both receipts and payments. The goods deficit rose slightly to $269.7 billion from $268.9 billion in Q1, led by imports of industrial supplies and materials, mainly petroleum and products and metals and nonmetallic products.

The Confederation of British Industry's order book balance rose by four points to an all-time high of +22 in September 2021, easily beating market expectations of +15, according to the latest monthly CBI Industrial Trends Survey. Manufacturing firms saw total order books improve further on August’s strong results to reach a record high, while export order books also improved to their strongest since March 2019. However, output growth in the three months for September slowed for the second month in a row, despite remaining firm by historical standards. Eleven out of 17 sectors saw output increase, with headline growth being driven largely by the food, drink & tobacco sub-sector. Stock adequacy picked up slightly, but nonetheless remained close to last month’s record low and considerably below average. On the price front, expectations for output cost growth in the coming quarter remain strong.

Japanese rubber futures dropped to below 190 yen per kg in late September, remaining close to their lowest level since August 2020, on expectations of lower demand from top customer China, concerns about slowing global growth, and a slowdown in auto production due to a chip shortage. Chinese data released last week pointed to slower growth in the second half of this year while the potential default of over-indebted property giant Evergrande prompted commodities sell-off.

Asian shares were mixed on Tuesday following the global sell-off Monday due to contagion risks from debt trouble at China Evergrande. The Nikkei 225 sank 2.2% on its first trading day of the week as investors return from a holiday and react to Chinese turmoil. Equities in Hong Kong extended their losses (-0.2%), hovering at over an 11-month low, with shares of the cash-strapped developer continuing to slide, falling by 3.1%. Evergrande is due to pay $83.5 million in interest relating to its March 2022 bond on Thursday. It has another $47.5 million payment due on September 29th for March 2024 notes. Stocks in Australia rose 0.3% however after falling slightly in the early session, after RBA's meeting minutes showed that the economy will return to its pre-Delta path by mid-2022. Markets in China and South Korea remained closed for holidays.