Stocks steady as investors cautiously await US inflation data

Stocks remained steady on December 11 as investors awaited key U.S. inflation data, which could influence future Federal Reserve rate cuts. European markets experienced slight losses, influenced by disappointing corporate results, while U.S. stock futures held steady. Investors were especially cautious given the high likelihood of a U.S. rate cut next week, with Wall Street indexes near record highs. The median forecast for U.S. inflation in November predicted a 0.3% monthly increase in both headline and core prices, though analysts cautioned against potential surprises.

In Asia, the MSCI index for Asia-Pacific shares outside Japan fell 0.5%, with China’s yuan weakening amid concerns over potential higher tariffs. The dollar remained strong, reaching a two-week high, while other Asian currencies like the Korean won and the Australian dollar also weakened. This trend was influenced by reports suggesting that China may allow its currency to weaken further in 2025 as part of efforts to cope with economic pressures.

In Canada, markets were focused on the Bank of Canada’s rate decision, with expectations of a 50-basis-point cut. This came after news of a significant rise in Canada’s unemployment rate, prompting speculation that the Fed may follow suit with its own rate cut. Global foreign exchange markets showed little movement, but the euro and yen both dipped slightly, while the British pound strengthened against the euro amid a hawkish Bank of England stance. Oil prices and coffee futures saw modest increases, reflecting China’s new policies and concerns over weather impacts on production.