In the US, the FOMC minutes revealed that the debate among policymakers on its interest rate guidance was more robust than in prior months. Several officials showed concerns about misleading investors and pushed for a more data-dependent approach.
"The concern was raised that the reference to "considerable time" in the current forward guidance could be misunderstood as a commitment rather than as data-dependant".
The minutes also showed that a "couple" of participants were concerned that that the strengthening US dollar will hurt some parts of the economy and lower longer-term inflation expectations.
European shares fell on Wednesday, extending their week long sell-off as concerns about global economic growth spooked investors. The FTSEurofirst 300 index fell by 0.8 per cent while the UK FTSE lost 0.2 per cent and the German Dax fell by 1.0 per cent. And Australia's major miners were weaker in London trade with shares in BHP Billiton down by 0.7 per cent while Rio Tinto lost 1 per cent.
US sharemarkets rallied sharply on Wednesday after the release of the Fed minutes. The Fed reassured investors that the first rate hike would not come until the economy could support it. Trading was choppy, with the S&P 500 shifting between a 0.5 per cent loss and a near 2 per cent gain. The VIX fell 12 per cent. Costco (up 2.7 per cent) reported strong fourth quarter earnings. Alcoa reports earnings after the bell. The Dow Jones gained 275 points or 1.6 per cent with the S&P 500 index up by 1.8 per cent while the Nasdaq gained 84 points or 1.9 per cent.
US treasury prices rose on Wednesday (yields lower) following the release of the Fed minutes. US Treasury sold $21 billion in 10-year notes on Wednesday, which was met with tepid demand. US 2 year yields fell by 6 points to 0.448 per cent while US 10 year yields fell by 3 points to 2.31 per cent.
Major currencies lifted further against the greenback over European and US sessions on Wednesday. The Euro rose from lows near $US1.2620 to highs near $US1.2750, ending US trade near $US1.2740. The Aussie dollar rose from lows near US87.30c to highs around US88.50c, ending the US session near US88.45c. And the Japanese yen eased from ¥107.85 yen per US dollar to ¥108.70, ending US trade near ¥108.10.
* World oil prices fell on Wednesday with investors focused on the downward revision to global growth forecasts. US crude stockpiles climbed by 5 million barrels last week against expectation of a 1.5 million barrel build. Brent crude fell to a 27-month low before recovering to close down by US73c or 0.8 per cent to US$91.38 a barrel while the US Nymex crude price fell by US$1.54 or 1.7 per cent a barrel to US$87.31 a barrel.
* Base metal prices were mostly weaker on Wednesday with the exception of Zinc (unchanged). Nickel led the declines down 2.5 per cent, with other metals down between 0.3 per cent-0.9 per cent. Gold fell with the Comex gold futures quote down by $US6.40 an ounce or 0.5 per cent to US$1,206 per ounce. Iron ore was down by US20c on Wednesday or 0.3 per cent to US$79.80 a tonne.
Ahead: In Australia, employment data is released. In the US, wholesale inventories are released.
Savanth Sebastian is an economist at CommSec.