EQUITIES

Trading in Asia-Pacific was higher on Wednesday. Japan's Nikkei 225 lead the gains regionally to surge 1.04%, breaking through the 29,000 barrier for the first time since Jan. 6, after the country reported better-than-expected exports growth for July compared to a year ago. Its exports growth of 19%, driven by a strong recovery in car exports.

In mainland China and Hong Kong market, the Shanghai Composite rose 0.28%, while the Hong Kong’s Hang Seng index was 0.84% stronger. The S&P/ASX 200 in Australia gained 0.18%, and the Singapore’s FTSE Straits Times Index added 0.36%.

Elsewhere, the South Korea’s KOPSI has reversed after a positive start, falling 0.46% likely due to some profit taking among the major stocks. Hyundai, Kia and Kanwha Aerospace all lost ground of about 2%. Stocks in New Zealand, the S&P/NZX 50 Index fell 0.10% after the central bank delivered its seventh straight interest rate hike.

Overnight on Wall Street, the Dow Jones Industrial Average rose 0.71% to 34,152.01, and the S&P 500 gained 0.19% to 4,305.2 as Home Depot posted higher than expected sales and Walmart increased its profit forecast. The Nasdaq Composite dropped 0.19% to 13,102.55.

OIL

Oil prices were flat on Wednesday, as recession worries raised uncertainty over global crude demand, while markets awaited clarity on talks to revive a deal that could allow more Iranian oil exports.

A larger-than-expected drop in U.S. oil and gasoline stocks manage to put investors slightly at ease. U.S. crude and fuel stocks fell in the latest week, according to market sources citing API figures on Tuesday. Crude stocks fell by about 448,000 barrels for the week ended Aug 12. Gasoline inventories fell by about 4.5 million barrels, while distillate stocks fell by about 759,000 barrels, according to the sources.

Brent crude futures rose 0.10% to $92.85 a barrel while U.S. WTI crude unchanged to $87.13 per barrel.

Oil prices had fallen overnight to their lowest since before Russia's invasion of Ukraine, dropped nearly 3% in volatile trading.

Markets speculating on Iran's response to a proposal to revive the 2015 nuclear deal. Oil supply could rise if Iran and the U.S. accept a proposal from the EU, which would remove sanctions on Iranian oil exports. The EU and US said on Tuesday they were studying Iran's response to what the EU has called its "final" proposal to save the 2015 nuclear deal after Tehran called on Washington to show flexibility.

CURRENCIES

Ten-year Treasury yields slightly lower and were trading at 2.810%, from overnight 2.873%. The yield curve between two- and 10-year Treasury notes, viewed as an indicator of impending recession, remained inverted on Wednesday.

The dollar index was at 106.381, steady in morning trade, having ended Tuesday largely unchanged.

The New Zealand dollar rallied after the central bank raised its cash rate by another 50 basis points to 3%, the latest in a series of interest rate hikes to curb inflation. The RBNZ delivered its seventh straight interest rate hike and signalled a more hawkish tightening path over coming months to restrain stubbornly high inflation. Australian dollar tumbled after wage growth data missed forecasts.

In cryptocurrencies, bitcoin was back hovering around $24,000, down from a two-month high spiked over the weekend.

GOLD

Spot gold gained 0.20% at $1,779.00 per ounce, after hitting its lowest since Aug 8 at S$1,770.86 on Tuesday. U.S. gold futures edged 0.20% higher to $1,793.10.

Elsewhere, spot silver eased 0.1% to $20.09 per ounce, platinum fell 0.1% to $933.86, and palladium was steady at $2,152.33.

ECONOMIC OUTLOOK

Asian shares tracked solid Wall Street performance on Wednesday as strong overnight earnings for U.S. retail giants pointed to further scope for the Federal Reserve to tackle inflation with rate hikes.

Investors have also been optimistic lately that the Federal Reserve can achieve a soft landing for the economy as it tightens policy and raises interest rates to reduce decades-high inflation. Strong earnings from Walmart and Home Depot helped drive gains in the Dow Jones and the S&P 500 indexes on Tuesday.

While the market may trade in positive-bias mode and looking forward to a brighter outlook in the ongoing earnings reporting season, China’s economic slowdown may indicate risk and a spike in recession fears.

Focus is on minutes from the July Federal Open Market Committee meeting later today and the Jackson Hole Symposium on Aug 25-27. Both these events will set the stage for Fed meeting in September. Investors also will be anxious to see July U.S. retail sales data, which is due on Wednesday as well with investors watching for further signs of a recession. The minutes of the Fed's July 26-27 policy meeting are due at 1800 GMT.