FOMC Minutes failed to convince markets to keep reaching new heights as the gist of it clearly showed how confused the officials are.
In European Equity Markets the pan-European Stoxx 600 closed up around 0.7 percent on Wednesday, with most sectors and major bourses in positive territory. Europe's autos stocks led the gains, up more than 2.3 percent. Ireland's Glanbia rose to the top of the European benchmark as the nutrition company reported that pre-tax profit rose 16 percent in 2018, adding it expected to deliver growth between 5 percent and 8 percent in 2019. Shares of the group jumped 11.8 percent on the news.
In Currency Markets the U.S. dollar on Wednesday recovered from the previous sessions’ roughly two-week lows to trade slightly higher on the day within narrow ranges as traders remained cautious ahead of the release of U.S. monetary policy minutes. The dollar, however, rose 0.2 percent against the yen to 110.82 after disappointing trade numbers showed Japanese exports fell the most in two years in January. The euro was little changed against the dollar at $1.1344 as investors waited for cues on where U.S. monetary policy is headed after the Fed’s recent dovish tilt.
In Commodities Markets oil fell on Wednesday after the U.S. government said shale output would rise to a record next month, denting a rally that sent prices to their highest this year. Brent futures eased by 53 cents to trade at $65.92 a barrel, still within sight of Monday’s high for the year of $66.83. U.S. futures were at $55.77 a barrel, down 31 cents, having touched a 2019 peak of $56.39 earlier. The EIA said in a monthly report on Tuesday shale production alone will hit a record 8.4 million barrels per day next month, suggesting little chance of a near-term slowdown in overall U.S. crude output.
In US Equity Markets stocks rose sluggishly on Wednesday, as investors awaited the Federal Reserve’s minutes from its latest meeting, while assessing the latest developments in the U.S.-China trade talks. The S&P 500 was up 0.07 percent, at 2,781.59 and the Nasdaq Composite rose 0.21 percent, at 7,502.55. Southwest Airlines Co fell 5.4 percent after the carrier said it would take a $60 million hit from the partial U.S. government shutdown. The carrier dragged down shares of other airlines, sending the Dow Jones US Airlines index down 2.40 percent.
In Bond Market the Treasury yield curve steepened on Wednesday morning ahead of the publication of minutes from the Federal Reserve’s January policy meeting at which the committee expressed “patience” in raising interest rates. Two-year yields, which rise in step with expectations of rate hikes, were 0.9 basis point lower at 2.491 percent. Longer dated yields rose to 2.652 percent for the 10-year and 3.004 percent for the 30-year. The yield curve, measured as the spread between two- and 10-year yields, widened to 15.9 basis points.