US stocks were mixed on Tuesday, with both the S&P 500 and the Dow Jones trading around the flatline, while the Nasdaq lost about 0.4%, slightly retreating from record levels touched in the previous session. Traders continue to digest comments from several Fed policymakers which point to a longer period of elevated interest rates. At the same time, the earnings season continues with Nvidia report scheduled for tomorrow. Industrials, real estate and consumer staples were the worst performing sectors while health and utilities outperformed. Meanwhile, Palo Alto sank about 6% after its guidance failed to impress investors. Lowe's also fell 2.6% despite upbeat earnings and revenue. Among megacaps, Microsoft (0.5%) and Apple (0.3%) were in the green while Nvidia (-0.9%), Amazon (-0.5%), Meta (-0.4%) and Alphabet (-0.2%) declined.

The Eurozone posted a trade surplus of €24.1 billion in March 2024, wider than €19.1 billion in the same month of the previous year and better than market forecasts of €19.9 billion. It was the largest trade surplus since December 2020, as imports slipped by 12% yoy to €221.3 billion, largely on lower purchases of mineral fuels, lubricants and related (-15.9%); raw materials (-20.6%); machinery & transport equipment (-12.7%); chemicals and related (-14%) and manufactured goods (-12.9%). Among major trading partners, imports fell mostly from China, the US, the UK, Russia and Norway. Meanwhile, exports fell at a slower 9.2% to €245.4 billion, mainly due to reduced shipments of machinery & transport equipment (-11.2%); manufactured goods (-10.8%); raw materials (-14.4%); crude materials, inedible, except fuels (-16.9%); mineral fuels, lubricants and related (-7.8%) and chemicals and related (-8.1%). Exports declined mainly to the US, the UK, Switzerland and Russia.

Denmark’s economy contracted by 1.8% on quarter in the first quarter of 2024, after a 2.7% growth in the previous period, a preliminary estimate showed. The economic downturn was mainly due to a decline in both transport and industry. On the expenditure side, household consumption dropped (-1.9% vs 2.2% in Q4 2023), partly due to a sharp fall in vehicle purchases (-32.2% vs 27.3%). Net external demand also contributed negatively, as exports shrank (-4.8% vs 8%) while imports rose (0.8% vs 2.1%). Meanwhile, government spending went up (1.9% vs 0.2%), and fixed investments rebounded (5% vs -6.8%) driven by increased investment in housing (2.5% vs 1.4%), other construction and facilities (4.9% vs -0.8%), machines, means of transport (12.8% vs -12.4%), and intellectual rights (0.8% vs -13.1%). On an annual basis, the GDP grew by 0.2% in Q1, a significant slowdown from a 3.5% expansion in the preceding quarter.

Producer prices in Germany declined by 3.3% year-on-year in April 2024, following a 2.9% drop in the previous month, compared to market forecasts of a 3.2% fall. It marked the tenth consecutive month of producer deflation, dragged by a decline in energy costs (-8.2%), influenced by natural gas (-18.0%) and electricity (-14.0%). Meanwhile, prices of intermediate goods dropped by 3.1%, weighed by paperboard and paper products (-7.7%), metals (-5.8%), and basic chemicals (-6.6%). By contrast, prices of non-durable consumer goods increased by 0.3%, while those of durable consumer goods climbed by 1.0%. Also, prices of capital goods advanced 2.4%, mainly driven by rises in machinery prices (2.8%) and the prices of motor vehicles, trailers, and semi-trailers (1.7%). On a monthly basis, producer prices were up by 0.2%, the same pace as in March, and matching forecasts.

Inflation in Australia has declined more slowly than anticipated, with recent data and other information signaling that the risks around inflation somewhat have risen, minutes of the Reserve Bank's May policy meeting showed. The situation prompted the central bank to restart a discussion of an interest rate hike before finally deciding that the case to stay on hold was stronger as the board aimed to avoid "excessive fine-tuning". Importantly, inflation expectations remained well anchored while uncertainty around the economy stayed highly elevated. Policymakers reiterated that returning inflation to the target range of 2–3% remained its highest priority. It added that the goal could be reached in H2 of 2025 and the midpoint in 2026. Meantime, unemployment was expected to be around the level consistent with the committee's full employment mandate by mid-2025. The process was unlikely to be smooth and it was difficult either to rule in or rule out future changes in the cash rate target.

WTI crude futures fell to around $78 per barrel on Tuesday, extending losses from the previous session as investors continued to assess developments in the Middle East following the death of Iran’s president in a helicopter crash and emerging health concerns of Saudi Arabia’s king. Still, markets don’t appear too worried about oil supply from the region as there are no immediate signs of disruptions to oil flows. Investors also cautiously awaited OPEC’s upcoming meeting on June 1 for a potential rollover of production cuts. Meanwhile, recent events such as Ukraine's attacks on Russian refineries and a Houthi missile strike on a China-bound oil tanker in the Red Sea continued to pose risks to global supply. On the demand side, Atlanta Fed President Raphael Bostic said US interest rates are likely to trend higher than what markets anticipate, comparable to those seen in the 1990s.