A look at the day ahead in European and global markets from Rae

Wee

The highlight for the European day on Tuesday will be flash

euro zone inflation figures for May, which come ahead of an

expected rate cut from the European Central Bank (ECB) later in

the week.

Expectations are for consumer prices to have slowed to an

annual 2.0% last month after April's larger-than-expected 2.2%

rise, but what the reading means for the ECB's rate trajectory

will be the question on investors' minds.

The ECB is considered almost certain to cut its rates by a

quarter point to 2.0% on Thursday, but traders are

sensing a pause will then follow as the economy holds up better

than anticipated and longer-term inflation worries creep back.

U.S. tariff uncertainty, heightened further by ambiguity

over court rulings on the legality of the tariffs, makes the

backdrop challenging as the ECB weighs the impact to business

activity against implications for inflation further out.

And in more tariff news, the Trump administration wants

countries to provide their best offer on trade negotiations by

Wednesday, as officials seek to accelerate talks with multiple

partners ahead of a self-imposed deadline in just five weeks.

President Donald Trump's erratic trade policies continue to

cast a pall over markets, and the dollar fell anew to a six-week

low on Tuesday on signs of fragility in the U.S. economy.

Talks between Trump and Chinese leader Xi Jinping are

expected this week as trade tensions between the world's two

largest economies simmer. It remains to be seen whether it will

be a "beautiful" chat or if things could take a turn for the

worse.

Key developments that could influence markets on Tuesday:

- Euro zone flash CPI (May)

- U.S. Job Openings and Labor Turnover Survey (JOLTS) report

(April)

- Fed's Goolsbee, Logan speak

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(Editing by Jacqueline Wong)