EQUITIES

Shares in China gains in mixed Asia-Pacific trading on Wednesday, as investors reacting to the latest Chinese economic data, including industrial production and retail sales for May.

The Shanghai Composite in mainland China climbed 2.01% while the Hong Kong’s Hang Seng index rose 1.61%. China’s industrial output climbed 0.7% in May as compared with a year earlier, official data showed Wednesday, rising from the April’s 2.9% decline. Meanwhile, retail sales in May fell 6.7% year-on-year, better than the expected 7.1% fall.

Elsewhere in Asia-Pacific, the Nikkei 225 in Japan slipped 1.05%, the South Korea’s KOSPI fell 2.15%, and the S&P/ASX 200 in Australia declined 1.30%.

Overnight on Wall Street, the S&P 500 fell deeper into bear market territory, declining 0.38% to 3,735.48. The Dow Jones Industrial Average dropped 0.5% to a 16-1/2-month low. The tech-heavy Nasdaq Composite bucked the trend and managed to eke out gains, rising 0.18% to around 10,828.35.

European stocks are expected to open higher on Wednesday as global markets await the latest monetary policy decision from the U.S. Federal Reserve.

OIL

Oil prices made gains in a volatile trading Wednesday, rebounding from losses earlier in the session.

WTI crude futures rose 13 cents, or 0.11%, to $119.21 a barrel. Brent crude futures were up 241 cents, or 0.34%, to $121.50 a barrel.

CURRENCIES

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 105.013 on Wednesday, having hit 105.65 on Tuesday, its strongest since December 2002.

The value of the U.S. dollar rose as the markets appear to be expecting a 75-basis-point hike in the federal funds rate in the current FOMC meeting session, with the decision to be announced later today.

Bond markets rallied a shade after their recent hammering, with 10-year Treasury yields dipping to 3.431%, from Tuesday's peak of 3.498%. Two-year yields stood at 3.38%, after touching the highest since 2007 at 3.456% overnight.

Yields move inversely to prices. The 2-year and 10-year Treasury yield curve briefly inverted earlier this week as investors position for potentially aggressive monetary policy tightening to tame inflation. The yield curve inversion is closely monitored by traders and is often viewed as an indicator of potential recession ahead.

Bitcoin was down, trading just under $21,000, hurt by major crypto lender Celsius Network's freezing withdrawals earlier this week.

GOLD

Gold prices on Wednesday were lifted from near one-month lows by slightly weaker Treasury yields, ahead of a potentially aggressive interest rate hike from the U.S. Fed as it seeks to combat inflation amid mounting fears of an impending recession.

Spot gold was up 0.60% at $1,819.20 per ounce, after dropping to its lowest since May 16 at $1,803.90 on Tuesday. U.S. gold futures rose 0.34% to $1,819.60.

Spot silver gained 0.7% to $21.22 per ounce, while platinum rose 0.8% to $926.89, and palladium firmed 0.5% to $1,824.71.

ECONOMIC OUTLOOK

Asian markets were in a mixed mood as investors opted for a wait-and-see attitude on the latest economic assessment by the U.S. Federal Open Market Committee. The shell-shocked investors waited to see just how aggressive the Fed would be on rates, with many fearing drastic action would risk tipping the world into recession.

Central banks' efforts to raise interest rates to curtail inflation will remain in focus this week. The Fed, the Bank of England, and the Swiss National Bank are expected to raise rates at their meetings, while other central banks have turned more hawkish in the past month, underscored by bigger-than-expected rate hikes from India and Australia.

Investors have dramatically raised their bets that the Fed will raise interest rates by 75-bps rather than 50-bps, a swing in expectations which has fuelled a violent selloff across world markets. It is expected to announce its decision on interest rates at 1800 GMT later in the day.

China's latest COVID outbreak, traced to a 24-hour bar in Beijing, has raised fears of a new phase of lockdowns. The country's economy, however, showed signs of recovery in May after slumping in the prior month as industrial production rose unexpectedly.

China’s industrial output climbed 0.7% in May as compared with a year earlier, official data showed Wednesday, rising from the April’s 2.9% decline. Meanwhile, retail sales in May fell 6.7% year-on-year, better than the expected 7.1% fall.