Asian stocks were subdued as traders braced for inflation data. Tuesday saw a little increase in Asian equities as the dollar languished close to three-month lows. Traders believed the Federal Reserve had completed its rate hikes and anticipated important inflation data later this week.

November is expected to be the best month since January for MSCI’s broadest index of Asia-Pacific equities outside of Japan (.MIAPJ0000PUS), up 0.29% and expected to gain close to 7%.

However, European stock markets were expected to begin poorly, with FTSE futures down 0.09%, German DAX futures down 0.18%, and Eurostoxx 50 futures down 0.11%. Futures for U.S. stocks hardly moved.

Investors will be watching this week for fresh clues about the direction of prices and monetary policy, particularly the Fed’s preferred inflation measure on Thursday and consumer inflation data from the eurozone.

According to Vasu Menon, managing director of investment strategy at OCBC Bank in Singapore, the markets would feel more at ease with predictions that the Fed will stop if the report shows inflation dropping.

“But I think it’s not just this week’s inflation indicator; it’s also the December payroll numbers; they’ll be quite critical.”

According to CME’s FedWatch tool, markets are pricing in a 95% chance that the U.S. Federal Reserve will maintain current interest rates next month, with the prospect of a rate reduction beginning to gather traction in mid-2024.

We believe the Fed will most likely begin reducing interest rates when inflation falls below the 3% threshold. And perhaps we see it occurring in the middle of next year,” Menon stated.

However, representatives of the main central banks have tried to dampen speculation about an impending rate reduction by emphasizing that higher rates will be necessary for some time to combat inflation.

“We believe that monetary policy will probably need to be restrictive for a long time,” Dave Ramsden, deputy governor of the Bank of England, stated during a conference held in Hong Kong.

Although the euro zone’s inflation pressures are lessening, European Central Bank President Christine Lagarde stated Monday that the bank’s battle to restrain price increases is ongoing. She cited the continued strength of wage growth and an unpredictable future.

Additionally, Fed Chair Jerome Powell is scheduled to speak on Friday. Traders will be closely examining his remarks to determine the direction that rates may go.

A day after statistics revealed earnings at China’s industrial businesses expanded at a slower pace in October, Hong Kong’s Hang Seng index (.HSI) plummeted 1% and the country’s blue-chip CSI 300 Index (.CSI300) dipped 0.17%.

Though it dipped 0.12%, Japan’s Nikkei (.N225) is up 8% this month and is expected to have its best monthly performance in three years.

According to U.S. data released on Monday, sales of newly constructed single-family houses decreased more than anticipated in October due to rising mortgage rates that made them less affordable. Despite this, the housing market is nevertheless sustained by a chronic scarcity of older homes.

The benchmark 10-year note yield fell 9.6 basis points on Monday due to the less-than-expected statistics affecting Treasury rates. They were up 0.8 basis points at 4.396% during Asian hours.

The dollar index, which compares the value of the U.S. dollar to a basket of other currencies, dropped to 103.07, the lowest level since August 31. With a 3% fall, the index is headed for its biggest monthly decline in a year.

The euro dropped 0.05% to $1.0948, while the Japanese yen gained 0.27% to 148.27 per dollar.

After rising to a four-month high of $0.6632, the Australian dollar increased by 0.19% to $0.6619. The New Zealand dollar recently traded at $0.60985, achieving a seven-week high of $0.6114 earlier in the session.

According to data, retail sales in Australia surprisingly declined in October as customers reduced their spending on everything but food. However, analysts surmise that many of these consumers were probably hoarding money in anticipation of this month’s Black Friday bargains.

Ahead of the OPEC+ meeting later this week, oil prices fluctuated between gains and losses. U.S. crude slipped 0.13% to $74.76 a barrel, while Brent returned below $80.

Spot gold set a new six-month high of 2,017.89 earlier in the session, and it was up 0.1% at $2,015.00 an ounce.