Market momentum drained by lack of news coverage

Stock market momentum is waning as investors await fresh economic clues, with the focus squarely on the Federal Reserve and its potential rate cuts. Asian equity indexes saw mixed results on Tuesday, with the Hang Seng leading the decline while Japan’s Nikkei benefited from the Nasdaq’s record run.

The Fed remains at the center of the market universe, influencing all asset classes including crude oil, gold, base metals, and cryptocurrencies. After a downside CPI surprise last week, investors rushed to reintroduce Fed easing bets, but Fed officials have struck a cautious posture.

Currently, about 40 basis points of easing are priced in for this year, with a quarter-point reduction by November considered likely. More Fedspeak is expected today, with Governor Christopher Waller and several regional Fed bosses scheduled to speak at various events.

Meanwhile, Bank of England Governor Andrew Bailey will give a lecture at the London School of Economics. UK CPI data will be closely watched, although it is not due until Wednesday. In terms of Tuesday’s local data, the highlight in Europe will be German producer price figures for April.

Key developments that could influence markets today include Germany producer prices for April, BoE Governor Andrew Bailey’s speech, and appearances by several Fed officials including Waller, Williams, Bostic, Mester, Collins, and Barkin. The minutes of the Fed’s last policy meeting, due Wednesday, will also be closely monitored.