Asian and European stocks rallied Tuesday and the dollar dipped as weak US data sparked hopes the Federal Reserve could ease its interest-rate hiking plans. Frankfurt and Paris equities soared more than three percent in value after similar stellar gains in Tokyo, while London won two percent. “Weaker-than-expected manufacturing data from the US was taken as a signal that rising interest rates may be having some effect on cooling demand for goods,” said Interactive Investor analyst Richard Hunter.”This in turn led to hopes of a Federal Reserve pivot, even though the spectre of inflation remains firmly at the top of their stated to-do list.” The Fed and other central banks across the world have raised interest rates in efforts to tame runaway inflation, but the monetary tightening has raised fears that it could plunge countries into recession. Wall Street had enjoyed a bumper start to the fourth quarter on Monday after data showed US manufacturing growth slowed more than expected in September to its weakest in more than two years. The Institute for Supply Management said its manufacturing index dropped 1.9 points to 50.9 percent, just barely above the 50-percent threshold indicating expansion, as the prices index fell to the lowest in more than two years. Eurozone manufacturing survey data out Monday showed a contraction on the back of the region’s ongoing energy crisis. “The turnaround in risk appetite appears to have been driven by another deterioration in PMI surveys as traders speculate that such weakness could be a precursor to slower monetary tightening,” noted OANDA market analyst Craig Erlam. Asian markets built on the Wall Street surge. Tokyo and Seoul were among the leaders, despite news that North Korea had fired a missile over Japan for the first time since 2017. Sydney soared 3.8 percent after the Reserve Bank of Australia lifted interest rates by less than expected. Hong Kong and Shanghai were closed for holidays. Investors will focus later this week on Friday’s all-important US jobs figures for the latest reading on the health of the world’s biggest economy. Oil also continued to rise on expectations OPEC and other major producers will slash output this week, having become spooked by a plunge in the commodity on recession fears. The 13 members of the Organization of the Petroleum Exporting Countries (OPEC), led by Riyadh, and their 10 allies headed by Moscow will hold Wednesday their first in-person meeting at the group’s headquarters in Vienna since March 2020. The rally in equities came as the dollar weakened owing to lower expectations for US monetary tightening, with the pound also supported by the UK government’s decision to scrap a planned cut in the top rate of income tax. Finance minister Kwasi Kwarteng has dropped the proposal, which was part of a big-borrowing mini-budget that sent shudders through markets. The pound extended gains after breaking back above $1.13, having last Monday tanked to a record low $1.0350.