The US Federal Reserve said that economic activity has been expanding at a "solid pace" but "based on its current assessment, the Committee judges that it can be patient in beginning to normalise the stance of monetary policy". It was a unanimous decision by policymakers. Last meeting there were three dissenters to the decision.
In US economic data, the weekly mortgage market index fell by 3.2 per cent in the latest week with purchases down 0.1 per cent and refinancing down 5.1 per cent.
European shares rose only modestly on Wednesday, weighed down by weaker Greek shares. The FTSEurofirst 300 index rose by 0.1 per cent with the Greek ATG index down by 9.2 per cent. But other European markets were firmer with solid earnings from Apple boosting the tech sector. The German Dax was up by 0.8 per cent with the UK FTSE up by 0.2 per cent. Mining shares rose in London in response to higher metal prices with BHP Billiton up by 0.4 per cent while Rio Tinto lifted by 0.8 per cent.
US sharemarkets were mixed on Wednesday. Solid earnings from Apple boosted investor sentiment, especially in the technology sector. Shares in Apple rose by 7.7 per cent after posting the highest profit in US corporate history. But investors were worried about the timing of future rate hikes. At the close, the Dow Jones was down by 196 points or 1.1 per cent, the S&P 500 index was down by 1.4 per cent and the Nasdaq was down 43 points or 0.9 per cent.
US long-term treasury prices were firmer (yields lower) on Wednesday after the Federal Reserve reiterated that it will be "patient" before finally deciding to lift interest rates. US two-year yields fell by 5 points to 0.477 per cent while US 10-year yields were down by 10 points to 1.73 per cent.
Major currencies trended sideways against the greenback in European and US trade on Wednesday. The Euro traded between $US1.1305 and $US1.1380 and was near $US1.1315 in afternoon US trade. The Aussie dollar eased from highs near US80.20c to lows around US79.40c but was near US79.50c in afternoon US trade. And the Japanese yen strengthened from 118.21 yen per US dollar to ¥117.45 and was near ¥117.60 in afternoon US trade.
World oil prices fell on Wednesday on data showing record US crude stocks. The US Energy Information Administration said crude oil stocks rose by almost 9 million barrels last week to reach nearly 407 million -- the highest since the government began keeping records in 1982. The Brent crude price fell by $US1.00 or 2.0 per cent to $US48.60 a barrel while the US Nymex crude price fell by $US1.78 or 3.9 per cent to $US44.45 a barrel.
Base metal prices rose by up to 1.8 per cent on Wednesday with nickel leading the gains. But aluminium and tin fell up to 0.5 per cent. Gold eased with Comex gold futures price down by $US5.80 an ounce or 0.4 per cent to $US1,285.90 per ounce. Iron ore fell by US10c or 0.2 per cent on Wednesday to $US62.70 a tonne.
Ahead: In Australia, data on export and import prices is released. In the US, weekly data on claims for unemployment insurance is released with pending home sales.
Craig James is chief economist with CommSec.