TORONTO - The Toronto stock market appeared set to open little changed as traders look to a meeting by the U.S. Federal Reserve and what the central bank may decide to do about cutting back on asset purchases.

The Canadian dollar was unchanged at 94.46 cents US.

U.S. futures were slightly higher with the Dow Jones industrial futures ahead 16 points to 15,839, the Nasdaq futures rose three points to 3,473 and the S&P 500 futures added 0.5 of a point to 1,780.8.

Traders are playing it cautious ahead of an announcement expected mid-afternoon Wednesday as they weigh the odds of the Fed starting to taper its monthly US$85 billion of bond purchases. This third episode of quantitative easing by the Fed has underpinned a strong rally in many stock markets while keeping long-term rates low.

Opinion is split with many analysts believing incoming chair Janet Yellen may hold off until March, allowing the Fed to collect more data pointing to a steadily improving economic climate and particularly job creation.

The key piece of economic news later in the morning will likely be U.S. inflation figures for November. If price pressures remain benign, then it may encourage the Fed to maintain its current level of bond purchases.

Analysts suggest that low inflation only registering a shade over one per cent is the prime reason why the Fed might decide to postpone tapering as other data out recently have been overwhelmingly positive.

Commodity prices retreated amid concerns that economies would falter if the Fed tapers.

The January crude contract on the New York Mercantile Exchange slipped 32 cents to US$97.16 a barrel.

March copper edged one cent lower to US$3.32 a pound while February bullion gained $10.30 to US$1,234.10 an ounce.

In corporate news, Saputo Inc. (TSX:SAP) says it’s willing to pay substantially more for Australia’s Warrnambool Cheese and Butter if it can get as much as 90 per cent of its stock. The company is maintaining its base offer at AU$9 per share but says it will pay as much as AU$9.60 cash per share if it gets at least 90 per cent of WCB’s stock. That would value the deal at C$510 million.

European bourses were lower despite a survey that found that German investor confidence jumped to a 7 1/2-year high in December on the back of hopes of an economic upturn in Europe. The ZEW institute’s confidence index, which measures investors’ expectations for the next six months, rose to 62 points from 54.6 in November.

London's FTSE 100 index dipped 0.31 per cent, Frankfurt's DAX was off 0.17 per cent while the Paris CAC 40 fell 0.7 per cent.

Asian stocks were mixed. Japan’s Nikkei 225 closed up 0.8 per cent, Hong Kong’s Hang Seng slid 0.2 per cent, China’s Shanghai’s Composite fell 0.5 per cent and Australia’s S&P/ASX 200 inched up 0.3 per cent.

News from © The Canadian Press, 2013