Asia markets mostly poised to extend gains as Europe signals rate cut possibility, Australia retail sales on deck

Asia-Pacific markets are mostly set to extend the previous session’s gains on Tuesday as investors assess comments from the European Central Bank officials signaling that rate cuts may be on the horizon for the world’s largest economic bloc.

In Asia, futures for the S&P/ASX 200 pointed to a stronger open, standing at 7,820 compared to the index last close of 7,788.3. Australia is expected to release its retail sales data later today.

Japan’s Nikkei 225 is also set to continue its advance, with the futures contract in Chicago at 38,940 and its counterpart in Osaka at 38,930 against the index’s last close of 38,900.

However, futures for Hong Kong’s Hang Seng index stood at 18,803, pointing to a slightly weaker open compared to the HSI’s close of 18,827.35.

In a speech Monday, Olli Rehn, ECB governing council member and head of Finland’s central bank, stressed inflation in the euro area was falling in a “sustained way.” He added: “The time is thus ripe in June to ease the monetary policy stance and start cutting rates.”

Inflation in the euro zone held steady at 2.4% in April, marking the seventh straight month it has been below 3%, despite a slight rebound in December. The data for May will be out Friday.

Meanwhile, the ECB’s Chief Economist Philip Lane said in an interview with the Financial Times, “Barring major surprises, at this point in time there is enough in what we see to remove the top level of restriction.”

The comments come ahead of the central bank’s next meeting on June 6. Markets are now indicating a very high chance of a quarter-percentage-point cut to the ECB’s main rate, from 4% currently.

U.S. markets return to trade today after being closed Monday for Memorial Day, with stock futures for all three major indexes rising.

Futures for the blue-chip Dow Jones Industrial Average climbed 0.09%, while those tied to the S&P500 were up 0.13%. Nasdaq futures saw the most gains, rising 0.21%.

— CNBC’s Katrina Bishop contributed to this report.