The Dow Jones Index (US30) fell by 0.28% on Tuesday. The S&P500 Index (US500) was up 0.40%, and the Nasdaq Technology Index (US100) rose by 0.71%. The escalating Ukraine-Russia war caused a de-risking of stock markets and liquidation of equities. Investors sought safer assets after Ukraine used Western-made missiles to strike Russia, and President Vladimir Putin expanded Russia’s nuclear doctrine to authorize a nuclear response to major conventional attacks.

The Canadian dollar strengthened above 1.4 per dollar as inflation data tempered expectations about the extent of the Bank of Canada’s (BoC) rate cuts. The reduced average core inflation rate, the Bank of Canada’s preferred measure of core inflation, rose to 2.6% in October from a three-year low of 2.4% in September, beating expectations. This came amid favorable economic data, including a lower-than-expected unemployment rate and strong PMI readings, further dampening prospects for a significant rate cut.

Equity markets in Europe ended trading yesterday on a weak note. Germany’s DAX (DE40) fell by 0.67%, France’s CAC 40 (FR40) closed down 0.67%, Spain’s IBEX 35 (ES35) lost 0.74%, and the UK’s FTSE 100 (UK100) closed down 0.13% on Tuesday. Concerns over the impact of US trade tariffs on Eurozone growth and geopolitical tensions weighed on sentiment.

WTI crude oil prices traded around $69 per barrel, caught between geopolitical tensions and easing worries in the Middle East. Russia’s conflict with Ukraine intensified as Ukrainian forces used Western-supplied missiles for the first time, and President Putin expanded Russia’s nuclear doctrine. Meanwhile, the IAEA announced that Iran has agreed to halt uranium production, potentially reducing tensions in the region.

Asian markets mostly rose yesterday. Japan’s Nikkei 225 (JP225) rose by 0.51%, China’s FTSE China A50 (CHA50) gained 0.35%, Hong Kong’s Hang Seng (HK50) added 0.44%, and Australia’s ASX 200 (AU200) increased by 0.89%.

The People’s Bank of China (PBOC) kept key lending rates unchanged at the November fixing, in line with market assessments. The one-year prime rate (LPR), the benchmark for most corporate and household loans, was maintained at 3/1%. The five-year rate, the benchmark for mortgage loans, remained at 3/6 %. Both rates remain at record lows following rate cuts in October and July. The latest decision reflects the Chinese Central Bank’s current assessment of existing stimulus measures.