HONG KONG (Reuters) - Asian stocks are set to rise in opening trade on Tuesday following overnight gains on Wall Street, while oil is set to extend a week-long rally after major producers Saudi Arabia and Russia said supply cuts needed to continue into 2018.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent to its highest level since June 2015. Early Asian markets such as Australia are set to lead the region higher, with metal and oil shares in focus.
The S&P 500 and the Nasdaq reached record closing highs on Monday, powered by demand for technology stocks after the weekend's massive "ransomware" cyber attack and as rising oil prices lifted commodity-linked shares.
Oil jumped 2 percent to its highest in more than three weeks on Monday, briefly topping $52 a barrel after Saudi Arabia and Russia said that supply cuts need to last into 2018, a step towards extending an OPEC-led deal to support prices for longer than first agreed.
Global benchmark Brent crude settled up 98 cents, or 1.9 percent, at $51.82 a barrel, having touched $52.63, the highest since April 21.
It has gained nearly 9 percent over the last week though some analysts were sceptical about the durability of the rally despite the proposed supply curbs.
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"That is going to be easier said than done, it appears, with U.S. production running at its fastest pace since August 2015 and data yesterday confirming that Chinese growth momentum continues to moderate," ANZ strategists wrote in a daily note.
Chinese growth cooled in April according to a variety of economic indicators ranging from factory output to retail sales as authorities clamped down on debt risks in an effort to stave off a potentially damaging hit to the economy.
In currencies, the greenback nursed deep losses after a weak U.S. manufacturing report trimmed expectations of a U.S. rate increase next month, a key factor behind the dollar's gains in recent weeks.
The dollar was steady at 98.87 against a trade-weighted basket of its peers after falling more than 1 percent in the last three sessions.
The New York Federal Reserve's barometer on business activity in the state unexpectedly fell in May, sinking into negative territory for the first time since October.
Expectations of a rate increase in June fell to 74 percent compared to 84 percent last week, according to the CME Fedwatch.
A risk-on undertone meant gold was flat after small gains over the last week.
(Reporting by Saikat Chatterjee; Editing by Eric Meijer)