Investing.com - Here are the top five things you need to know today in financial markets:
1. China sets yuan at 4-year low
China cut the yuan's reference rate to the weakest level since August 2011 on Wednesday, amid heavy capital outflows, persistent worries over an economic slowdown and before an expected increase in U.S. interest rates later this month.
China's central bank reduced the yuan’s fixing by 0.1% to a four-year low of 6.4140 a dollar. The spot rate dropped 0.17% to close at 6.4280 (USD/CNY) in Shanghai.
2. Chinese inflation picks up in November
Chinese consumer price inflation rose last month, according to data released on Wednesday, indicating that Beijing’s effort to bolster growth in the world’s second-largest economy may be starting to take effect.
The National Bureau of Statistics reported that China’s consumer price index rose 1.5% in November from a year earlier, slightly better than economists’ forecast for an increase of 1.4% after a 1.3% rise in October.
China’s producer price index fell 5.9% on a year-over-year basis, matching October’s decline, the agency said. It was the 45th consecutive month of declining producer prices, amid weak demand and falling global commodity prices.
3. Oil rebounds but hold near 7-year lows
Oil prices rebounded on Wednesday, amid speculation weekly supply data due later in the session will show U.S. crude inventories fell for the first time in 11 weeks, but gains were limited as a global supply glut remained on investors' minds.
U.S. crude was last up 54 cents, or 1.43%, at $38.05 a barrel as of 6:10AM ET, while Brent tacked on 44 cents, or 1.09%, to $40.70.
4. Global shares weaker in risk-off trade
Global stock markets were in the red on Wednesday, as market sentiment remained subdued amid lingering concerns over the health of China's economy.
Asian stocks ended mostly lower, as market players monitored movements in oil and other battered commodities. The downbeat mood spilled over to Europe, where Germany's DAX was down around 0.6%.
Meanwhile, U.S. stock futures were down between 0.1% and 0.3%, suggesting a weaker open on Wall Street later in the day. U.S. markets fell in a choppy session on Tuesday, as lower oil prices pressured energy stocks for a fifth day and weak Chinese trade data reignited fears of a global slowdown.
5. Dow Chemical , DuPont (N:DD) in merger talks
Dow Chemical (N:DOW) and DuPont are in advanced talks to merge, creating a chemicals giant with a market value of more than $120 billion that could then break up into different businesses, people familiar with the matter said on Tuesday.
The deal, which could be announced in the coming days, would be followed by a "three-way breakup of the combined company," DuPont CEO Edward Breen would be CEO of the post-merger company, and Dow CEO Andrew Liveris its executive chairman.
Dow Chemical shares rallied 7.7% ahead of the open to $54.82, while DuPont jumped 7% to $71.30. Each company has a market cap near $60 billion.