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European stocks and US futures hold steady

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Japanese and Chinese shares rise, following Wall St

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Euro zone inflation ticked up in December

(Updates after euro zone inflation data)

By Harry Robertson and Rae Wee

LONDON/SINGAPORE, Jan 7 (Reuters) - European shares held

steady on Tuesday after inflation data matched expectations,

while Asian shares rose as some investors hoped U.S.

President-elect Donald Trump would adopt less aggressive tariffs

than previously thought.

Europe's continent-wide STOXX 600 index was last up

0.1%, after rising 0.95% on Monday following a news report that

said Trump may consider narrower tariffs, which caused shares of

automakers to rally. Germany's DAX was up 0.2% while

Britain's FTSE 100 fell 0.2%.

MSCI's broadest index of Asia-Pacific shares outside Japan

climbed 0.2%. Japan's Nikkei rose 2%,

boosted by a rally in technology stocks. China's CSI 300 index

gained 0.7%.

China's main stock exchanges asked some large mutual funds

to restrict stock selling at the start of the year, three

sources familiar with the matter said, as authorities sought to

calm markets heading into a tricky period for the world's

second-largest economy.

In the United States, S&P 500 futures were flat and

Nasdaq futures lost 0.1% after the underlying indexes

rose on Monday to more than a one-week high, aided by tech

companies.

The Washington Post reported on Monday that Trump aides were

exploring tariff plans that would be applied to every country

but only cover certain sectors deemed critical to national or

economic security, in what would represent a marked softening

from promises Trump had made during the 2024 presidential

campaign.

While the news initially sent stocks rallying and the dollar

tumbling, Trump's subsequent denial reversed some of the U.S.

currency's declines.

"No one really knows for sure what kind of tariffs or trade

policies the Trump administration will implement," said Khoon

Goh, head of Asia research at ANZ.

"It's still possible that what the Washington Post reported

is true. His officials and aides of course will go through and

come up with various options, but ultimately it's up to Trump to

decide."

DATA DUMP

Euro zone inflation data on Tuesday showed price growth

ticked up to 2.4% year-on-year in December on higher energy

costs, from 2.2% a month earlier. The data was in line with

expectations.

The key data release for the week will be the U.S. December

nonfarm payrolls jobs report on Friday. U.S. job openings data

is due later today, and Wednesday will bring weekly jobless

claims figures and ADP's estimate of hiring in December.

In currency markets, the dollar index fell 0.3% to near a

one-week low at 107.97, after dropping 0.55% in the

previous session as investors reckoned watered-down tariffs

would help other currencies relative to the greenback.

The euro and sterling extended gains from

the previous session, each rising 0.3% to trade at $1.042 and

$1.2558 respectively.

The Canadian dollar strengthened to 1.4305 per U.S.

dollar, extending a rally on Monday after Canadian Prime

Minister Justin Trudeau said he would step down in the coming

months.

"Should Canada move toward an early election in which a

Conservative-led government emerges, the CAD could appreciate,"

said Thierry Wizman, global FX and rates strategist at

Macquarie.

Minutes of the U.S. Fed's latest meeting due on Wednesday

will offer colour on officials' rate predictions, while there

will be plenty of commentary from several top policymakers.

U.S. 10-year Treasury yields, which set the tone for

borrowing costs around the world, held steady at 4.622%

, around their highest since May.