The Bank of Canada hiked its benchmark policy rate by 75 basis points to 3.25%, the highest level since April 2008.
In US economic data, the trade deficit narrowed by US$10.3bn to US$70.6bn in July (survey: -US$70.2bn).
The US Federal Reserve Beige Book, a periodic snapshot of the health of the US economy, indicated that price pressures are expected to persist at least through the end of the year.
European sharemarkets were mixed on Wednesday ahead of the European Central Bank policy meeting on Thursday. The panEuropean STOXX 600 index fell by 0.6% with energy shares down 3.1% as oil prices fell sharply. The German Dax index added 0.4% but the UK FTSE index dropped by 0.9%. In London trade, shares in Rio Tinto fell by 2.1% and BHP shares slid 2.9%.
US sharemarkets rebounded on Wednesday after US bond yields halted their surge to multi-year highs. Interest rate sensitive technology shares led gains with shares of Amazon.com (+2.7%), Tesla (+3.4%) and Microsoft (+1.9%) all trading higher. Apple shares climbed 0.9% after unveiling its new iPhone 14. At the close of trade, the Dow Jones index rose by 436 points or 1.4%. The S&P 500 index gained 1.8%. And the Nasdaq index added 247 points or 2.1%,
snapping a seven session losing streak.
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US treasuries strengthened on Wednesday (yields lower) as demand for US dollars helped send money into government debt. US Federal Reserve Vice Chair Lael Brainard said that the central bank will maintain tight monetary policy “for as long as it takes to get inflation down.” US 10-year yields fell by around 6 points to near 3.27%. And US 2-year yields fell by around 6 points to near 3.44%.
Major currencies were mostly firmer against the US dollar in European and US trade. The Euro rose from lows near US$0.9875 to session highs near US$1.0010 at the US close. The Aussie dollar lifted from lows near US66.98 cents to highs near US67.68 cents and was near US67.65 cents at the US close. But the Japanese yen eased from near 143.85 yen per US dollar to a 24-year low of JPY144.99 and was near JPY143.80 at the US close.
Global oil prices tumbled over 5% on Wednesday to their lowest level in over seven months as a strong US dollar and Chinese demand concerns prompted a wave of selling. The Brent crude oil price fell by US$4.83 or 5.2% to US$88.00 a barrel. And the US Nymex crude oil price lost US$4.94 or 5.7% to US$81.94 a barrel.
Base metals were mostly weaker on Wednesday as a surging US dollar and weaker-than-expected Chinese trade data added to a worsening demand outlook. Zinc fell by 1.7% with copper down 0.7% but lead rose 0.5%.
The gold futures price rose by US$14.90 an ounce or 0.9% to US$1,727.80 an ounce. Spot gold was trading near US$1,717 an ounce at the US close. Iron ore futures slid US43 cents or 0.4% to US$97.18 a tonne as virus curbs in China weighed on steel demand.
Ahead: In Australia, RBA Governor Philip Lowe delivers a speech. Payroll jobs and wages data is released with international trade figures. US Federal Reserve Chair Jerome Powell speaks.
Originally published by CommSec