Market sentiment sagged in overnight trading. The US dollar continued its recent slide, but commodity currencies fell harder, despite another lift in base metals and crude oil. European and US share indices tanked, with the exception of the Nasdaq 100, bolstered by a lift in Apple stock.

It’s difficult to identify the trigger for the turn around. German April trade data was both terrible and worse than expected, and US wholesale trade dropped 16.9% (forecast -2.0%). Still, markets have ignored woeful macroeconomic data for weeks. It’s possible the global rally has become a victim of its own success, and the pullback is simply a corrective move.

Cryptocurrency volatility is below other asset classes – another sign of strange times.

Asia Pacific traders are facing a negative day. The New Zealand dollar is testing support at 65 US cents, but the Australian dollar has failed below 70 cents. Futures markets indicate a flattish day for shares in Hong Kong and Singapore, but Japan and Australia are looking at opening falls of 1% plus.

The conclusion of the US Federal Reserve monthly meeting tonight may limit activity. While the Fed is not expected to move interest rates, the economic projections released after the meeting will be closely scrutinised for clues to Fed thinking.

Japanese data this morning could add to the weight on markets. Machine orders are down 17.7% year-on-year, and producer prices are down 2.7% over the same period. Chinese CPI is forecast 2.7% higher in May, ahead of US inflation tonight. If inflation disappoints, it may show that the flood of central bank stimulus is all that is keeping markets afloat.