LONDON/SINGAPORE - European futures hit record peaks on Tuesday as defense stocks soared on expectations of a spending bump.

Australia's central bank began its rate-cutting cycle, as expected, and the Australian dollar found support at $0.6350 as the cut came with caution on further easing.

S&P 500 futures were up 0.2 percent and European futures added 0.1 percent. Japan's Nikkei rose 0.5 percent with bank and defense-related shares taking their cues from Europe's rally.

On Monday, the pan-European STOXX 600 index closed 0.5 percent higher as a gauge of defense and aerospace stocks surged 4.6 percent to lifetime peaks, having already more than doubled in value since the conflict in Ukraine started three years ago.

Investors expect earnings in the industry to continue to rise strongly, reckoning a long era of modest defense budgets has ended and a rush to buy arms is beginning.

"If European defense spending gets anywhere near Trump's 5 percent of GDP target, European defense companies like Rheinmetall, SAAB, BAE Systems, Thyssenkrupp, and Thales can extend considerably their overnight gains," said Tony Sycamore, analyst at IG Markets in Sydney.

The euro hovered around $1.0455 in the Asia session, though Sycamore said a sustained break of $1.0530 would open the way to $1.06 and beyond ahead of Germany's weekend election.

Russian and US officials are scheduled to meet for bilateral talks on Tuesday in Saudi Arabia. Ukraine's President Volodymyr Zelenskiy has said the country would not recognize any decisions made in deliberations where they were not present.

US markets re-open later on Tuesday following a holiday.

The rest of the week is filled with data, including February flash business activity indicators across the globe while in Europe, markets also have their eye on German elections this weekend.

The yen steadied at 152.06 after the previous day's solid growth data bolstered chances of a rate hike in Japan in coming months.

The pound traded at around $1.2597, just below its highest level in two months, as investors looked towards employment and inflation data later in the week.

In commodity markets, gold came off Friday's record highs at $2,913 an ounce having rallied for seven weeks straight.

Oil producer group OPEC+ is considering pushing back a series of monthly supply increases due to begin in April despite calls from Trump to lower prices, Bloomberg News reported on Monday, citing delegates.

Brent held overnight gains at $75.39 a barrel.