US stock markets edged lower on Wednesday as weaker than expected economic releases weighed on investor sentiment. Producer prices fell a record 0.8% in January after an unprecedented drop in energy costs. The drop was larger than expected. Construction on new homes dropped 2% in January to an annual rate of 1.07 million units due to unfavorable weather conditions. Industrial production rose 0.2% in January, below expectations of a 0.4% increase. Stocks rebounded from session lows after Federal Reserve minutes release showed officials are concerned about the effect of slower overseas growth on economic recovery and are willing to let interest rates remain lower for longer than the market had expected. The committee members have expressed their concern about raising rates too soon with “many” on the Fed inclined toward keeping the federal funds rate at its effective lower bound for a longer time while only “some” thought it might be appropriate to raise the interest rate in the near term. The S&P 500 closed less than a point below its record closing on Tuesday, with energy stocks leading losses after a drop in oil prices. The dollar traded lower against its main rivals after the release of the Fed minutes. Today at 14:30 CET Initial Jobless Claims for the week ended February 14 and Continuing Claims for the week ended February 7 will be released in US. At 16:00 CET the Philadelphia Fed’s Business Outlook Survey results for February will be published. At the same time the Conference Board Leading Indicator for January will be released. The tentative outlook is neutral.
European stocks advanced on Wednesday after reports that the Greek government was preparing to submit a request for an up to six-month extension to its loan agreement on Thursday. The Stoxx Europe 600 index rose 0.9%. The international creditors insist on the extension of the bailout program, not just a loan agreement without austerity measures such as budget cuts and labor reforms. Eurozone finance ministers have tentatively scheduled a meeting on Friday to discuss Greece’s debt deal. The euro rose 0.2 % staying in a 2-cent range it has traded for more than three weeks. Today at 12:00 CET the February Total Orders will be published by the Confederation of British Industry. And at 16:00 CET the preliminary Euro-zone Consumer Confidence index for February will be released.
Nikkei is rising today and hit a 15-year intraday high as investor sentiment was boosted by trade data and cautious optimism over a solution of the Greek debt impasse. Data released today in the morning indicated surging exports cut Japan's trade deficit by more than half in January. Yen gained against the dollar following the release of Fed minutes indicating a more dovish stance of the central bank than previously expected.
Oil fell on Wednesday snapping a three-session winning streak as the oversupply concerns resurfaced ahead of the expected releases of data on US crude inventories. American Petroleum Institute’s supply data indicated US crude-oil supplies as of the week ended February 13 jumped 14.3 million-barrel from a week earlier. Today at 17:00 CET the Energy Information Agency report on US crude inventories will be released.
Gold fell to lowest level in nearly seven weeks on Wednesday, then rebounded after Fed minutes were released. Weaker dollar increases the demand for the safe haven asset.