Investing.com - Here are the top five things you need to know in financial markets on Wednesday, December 12:
1. Trump Optimistic on Trade
Investors will be keeping abreast of the ongoing trade spat between the U.S. and China amid recent signs the world's two largest economies will be able to resolve their differences.
In an interview with Reuters, U.S. President Donald Trump said talks were taking place with Beijing by phone and he would not raise tariffs on Chinese imports until he was sure about a deal.
Trump also said he would intervene in the Justice Department's case against a top executive at China's Huawei Technologies if it would serve national security interests or help close a trade deal.
A Canadian court on Tuesday granted bail to the executive in a move that could help placate Chinese officials angered by her arrest.
Washington and Beijing have been engaged in a trade dispute for the most part of the year, with both countries slapping tariffs on several of each other's products.
2. UK PM May Faces No-Confidence Vote
In Europe, British Prime Minister Theresa May will face a vote of no-confidence from members of her own Conservative party this evening, as Britain's planned divorce from the European Union was plunged into chaos.
Graham Brady, chairman of the party's so-called 1922 committee, a group of influential backbench members of parliament, said the threshold for a vote had been exceeded.
The vote is scheduled to take place this evening between 18:00 and 20:00 GMT (1:00PM ET and 3PM ET).
According to BBC's political editor Laura Kuenssberg, results are said to be announced at 21:00 GMT (4PM ET).
May could be toppled if 158 of her 315 lawmakers vote against her.
Speaking outside her Downing Street residence just over an hour after a confidence vote in her leadership was announced, May said she would fight for her job with everything she has got.
In a stark warning to Brexit-supporting opponents in her party, May said that if they toppled her, then Brexit would have to be delayed and perhaps even stopped.
The British pound fell on the confidence vote but then rose to 1.2535 (GBP/USD) by 5:40AM ET (10:40 GMT) on news that Brexit might have to be delayed.
3. Dow Futures Point to Triple-Digit Gains
U.S. stock futures pointed to a higher open, with the Dow set for a triple-digit gain, as optimism over the U.S.-China trade dispute lifted sentiment.
The blue-chip Dow futures were up 195 points, or 0.8%, the S&P 500 futures jumped 21 points, or around 0.8%, while the tech-heavy Nasdaq 100 futures indicated a gain of 71 points, or roughly 1.1%.
The moves in premarket follow another volatile session on Wall Street on Tuesday, which saw the major indexes oscillate between positive and negative territory before falling sharply in the last half hour of trading.
Elsewhere, European stocks were higher, with most major bourses across the region in positive territory for the second day in a row.
Earlier, Asian shares closed higher, with stocks in Japan and Hong Kong leading gains across the region.
Read more: Markets Buoyed By Trade War Progress: Craig Erlam
4. U.S. Inflation Data in Focus
The Commerce Department will publish November CPI figures at 8:30AM ET (13:30 GMT), which should give clearer signs on the pace of inflation.
Consumer prices are expected to have risen 0.1% last month, according to estimates, cooling from October's 0.3% gain. On a yearly base, CPI is projected to climb 2.2%, down from 2.5% a month earlier.
Excluding the cost of food and fuel, core inflation prices are forecast to have gained 0.2% last month and 2.2% over the prior year.
Weakening inflation will likely add to expectations that the Federal Reserve will need to slow its pace of rate hikes next year.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was little changed at 97.36.
In the bond market, U.S. Treasury yields inched higher, with the benchmark 10-year note standing at 2.88%, while the yield on U.S. government bonds with 2-year maturities was at 2.76%.
The Fed is widely expected to announce its fourth rate hike of 2018 next week, but investors are beginning to question how many increases it can implement next year.
5. Oil Prices Rally Ahead of EIA's Weekly Supply Report
In commodity markets, the U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended December 7 at 10:30AM ET (15:30 GMT).
Analysts expect the EIA to report a drop of around 3.0 million barrels in crude supplies. If confirmed, it would be the second straight weekly decline in domestic oil inventories.
The American Petroleum Institute (API) said on Tuesday that U.S. crude inventories dropped by 10.2 million barrels last week.
U.S. West Texas Intermediate crude futures were up 97 cents, or 1.9%, at $52.61 a barrel, while international Brent crude oil futures rallied 99 cents, or 1.6%, to $61.19 per barrel.
-- Reuters contributed to this report