LONDON - Global shares traded around one-month highs on Tuesday, boosted by renewed confidence in US interest rate cuts, while a weaker yen and small dip in the Australian dollar kept the dollar steady.

Last week saw a dramatic swing in investor expectations for the US interest rate outlook. Market pricing went from showing even one rate cut in 2024 looking less likely to almost two being priced in by Friday, after monthly employment data suggested the labour market is softening.

A hefty sell-off in US stocks early in the week, accelerated by volatile earnings, reversed, sending the benchmark S&P 500 index up by the most in a day since February after Friday's payrolls report, and adding to gains on Monday.

On Tuesday, US futures, pointed to a steady start later on, while stocks in Europe caught a bid from the banks, where UBS and Unicredit beat expectations, sending the STOXX 600 up 0.6 percent.

MSCI's All-World index was up 0.1 percent, around its highest since April 10.

"We remain in the camp that the right question is not whether we will get one or two rate cuts from the Fed this year," Jefferies strategist Mohit Kumar said.

"As long as the optionality of Fed cuts on any weakness remains, the Fed put is intact which will continue to support risky assets," he said.

The "Fed put" refers to a belief among investors that the central bank will step in to support the economy and financial markets in times of turmoil.

Futures show traders believe US rates will drop by around 45 basis points this year, from 5.25-5.50 percent right now. This time last week, just 28 bps were priced in.

On the earnings front, Disney, Occidental Petroleum and Wynn Resorts are due to report.

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The mood set by last week's softer-than-expected US jobs data was further underpinned by remarks from Federal Reserve Chair Jerome Powell reiterating that the next move in rates will be lower.

Treasuries, which rallied on Friday's jobs figures, traded steady in New York overnight and 10-year yields held at 4.49 percent in Tokyo on Tuesday. Interest rates markets price at least one US rate cut this year, in November.

Demand will be tested at a $58 billion three-year note auction on Tuesday, which is followed by $42 billion in 10-year sales on Wednesday and $25 billion of 30-year sales on Thursday.

Expectations of falling rates have weighed on the dollar, though only gently. European policymakers are readying cuts for June, capping the euro, and rates are not expected to move too far above zero in Japan this year, leaving a wide gap with the rest of the world.

The dollar rose 0.6 percent on the yen on Monday and a further 0.3 percent to 154.31 yen on Tuesday, keeping markets on edge as to whether Japanese authorities may step in again.

Traders estimate Japan spent almost $60 billion defending the yen last week.

Australia's central bank left interest rates on hold, as expected, but the Aussie dollar slipped about 0.4 percent to $0.6599 after policymakers did not strengthen guidance around the risk of another rate hike.

Sterling eased 0.2 percent to $1.254, while the euro was 0.1 percent lower at $1.07628.

In commodities, oil held steady, with Brent crude futures up 0.1 percent to $83.41 a barrel with a ceasefire deal in the Middle East proving elusive. Gold edged down 0.2 percent to $2.319 an ounce, still within sight of recent record highs.

Wheat, corn and soybean traded around multi-month highs on worries about unfavorable weather in Russia - where it has been frosty and dry - and Brazil, where there are floods.