European stock markets are poised for a mixed opening on Thursday, as investors await the interest rate announcements from the Swiss National Bank and the European Central Bank. Expectations are that both institutions will announce rate cuts, with discussions centering on a potential half-point cut from the Swiss and a 25 basis points reduction from the ECB.
In other developments, Brazil's central bank made headlines late Wednesday by raising its benchmark interest rate by a full percentage point. The bank signaled its intention to repeat such sizable increases in the next two meetings, driven by increasing concerns about inflationary pressures.
Meanwhile, the Bank of Canada executed another substantial cut to its key interest rate on Wednesday but suggested that the pace of cuts might slow down in the future.
The Federal Reserve is largely predicted to reduce rates by 25 basis points at its upcoming meeting on December 17-18. However, the trajectory of interest rates beyond December remains uncertain.
In the United States, data on producer price inflation for November, alongside a weekly jobless claims report due later today, could offer additional insights into the economic outlook and future rate decisions.
Across the Pacific, Asian markets exhibited mixed performances as investors awaited the results of an eagerly anticipated economic policy meeting in Beijing. Reports indicate Chinese officials may be contemplating allowing the yuan to weaken next year in response to the looming risk of a trade conflict with the U.S. The U.S. dollar remained stable after reaching a two-week peak in the prior session, bolstered by rising U.S. Treasury yields.
Gold prices dipped during Asian trading but maintained a level above $2,700 per ounce. Meanwhile, oil prices saw a slight uptick, building on overnight gains driven by potential sanctions against Russia from the European Union and expectations of rising demand from China.
Market participants also reacted to reports suggesting the U.S. is pondering additional sanctions on Russia's energy sector.
In the U.S., stocks saw broad gains overnight, and the dollar reached a two-week high as inflation data aligned with expectations, supporting the likelihood of the Federal Reserve implementing another quarter-point rate cut next week.
The latest data revealed that the U.S. consumer price index increased by 0.3% in November, marking the largest rise since April, following consistent 0.2% gains over the past four months.
Year-over-year, inflation rose to 2.7% last month, up slightly from 2.6% in October. Core inflation remained steady, increasing by 0.3% for the fourth consecutive month, with the annual rate meeting forecasts at 3.3%.
Technology stocks led the charge as the Nasdaq Composite soared 1.8%, setting a new record and closing above 20,000 for the first time. The S&P 500 climbed 0.8%, nearing a new high, while the Dow slipped slightly by 0.2%.
In Europe, markets closed higher on Wednesday, buoyed by U.S. inflation data that met expectations and reassurances from Chinese President Xi Jinping regarding China's commitment to achieving a 5% GDP growth target. The pan-European STOXX 600 rose by 0.3%, with Germany's DAX and the U.K.'s FTSE 100 each gaining approximately 0.3%, while France's CAC 40 added 0.4%.
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