Global Markets Hold Steady Amid Inflation Data and Tariff Speculation
European Shares Unfazed by Inflation Data
European shares held firm on Tuesday, with the continent-wide STOXX 600 index rising 0.1%, following a 0.95% gain on Monday. Germany’s DAX was up 0.2%, while Britain’s FTSE 100 fell 0.2%. The steady performance came as euro zone inflation data matched expectations, showing a 2.4% year-on-year increase in December.
Asian Markets Rise on Hopes of Softer Tariffs
In Asia, shares climbed as some investors hoped for less aggressive tariffs from the incoming Trump administration. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2%, while Japan’s Nikkei surged 2%, driven by a rally in technology stocks. China’s CSI 300 index gained 0.7%.
China Takes Steps to Calm Markets
In a bid to calm markets ahead of a challenging period for the world’s second-largest economy, China’s main stock exchanges asked some large mutual funds to restrict stock selling at the start of the year, according to sources familiar with the matter.
US Futures Flat Ahead of Key Jobs Report
In the United States, S&P 500 futures were flat, while Nasdaq futures lost 0.1%, following a rally on Monday that saw the underlying indexes reach a one-week high. The Washington Post reported that Trump aides were exploring tariff plans that would be applied to every country but only cover certain sectors deemed critical to national or economic security.
Tariff Uncertainty Persists
Despite the report, Trump’s subsequent denial has left investors uncertain about the administration’s trade policies. “No one really knows for sure what kind of tariffs or trade policies the Trump administration will implement,” said Khoon Goh, head of Asia research at ANZ.
Key Data Releases Ahead
The key data release for the week will be the U.S. December nonfarm payrolls jobs report on Friday. U.S. job openings data is due later today, and Wednesday will bring weekly jobless claims figures and ADP’s estimate of hiring in December.
Currency Markets React to Tariff Speculation
In currency markets, the dollar index fell 0.3% to near a one-week low, after dropping 0.55% in the previous session. The euro and sterling extended gains from the previous session, each rising 0.3% against the dollar. The Canadian dollar strengthened to 1.4305 per U.S. dollar, extending a rally on Monday after Canadian Prime Minister Justin Trudeau said he would step down in the coming months.
Fed Meeting Minutes and Rate Predictions
Minutes of the U.S. Fed’s latest meeting, due on Wednesday, will offer insight into officials’ rate predictions. Top policymakers will also provide commentary, which could impact market sentiment. U.S. 10-year Treasury yields held steady at 4.622%, around their highest since May.
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