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• The dollar gained against a basket of other currencies on Wednesday as U.S. stocks came off 20-month lows, though uncertainty relating to the U.S. government shutdown and Federal Reserve monetary policy remained a headwind for the greenback.

The dollar index against a basket of six other major currencies .DXY gained 0.43 percent to 96.967. It was down from a 1-1/2-year high of 97.711 on Dec. 14

Liquidity was thin after major markets were closed on Tuesday for the Christmas holiday. Markets in Britain, Germany and France remained closed on Wednesday.

• “There’s an endless laundry list of concerns: Trump berating the Fed, Trade Wars, China slowing growth, Brexit casualties, EU slowdown. But when you factor in a downturn in the U.S. economy, this is when things get ugly,” Stephen Innes, head of trading APAC at Oanda in Singapore, said in a note.

• Stocks and oil prices rebounded on Wednesday as the Trump administration attempted to shore up investor confidence and markets welcomed a report on strong U.S. holiday spending.

MSCI’s gauge of stocks across the globe gained 2.57 percent, while both U.S. and Brent crude rose about 8 percent, their largest one-day increase since Nov. 30, 2016.

• One economist said the Fed holds the key to calming markets.

“In the end, we believe that the Fed is the only presence capable of ending the current confusion in the markets,” Kenta Inoue, senior market economist at Mitsubishi UFJ Morgan Stanley Securities, said in a note. “The White House will probably keep making gestures intended to halt the rout in stocks, but the federal government is likely to remain shut into the new year. The U.S.-China trade war also shows no signs of a resolution.”

• The head of the U.S. Federal Reserve faces no risk of losing his job and President Donald Trump is happy with his Treasury secretary, a White House official said in an apparent attempt to calm Wall Street nerves frayed by Trump’s criticism of the Fed.

Asked on Wednesday if Fed Chairman Jerome Powell’s job was safe, White House economic adviser Kevin Hassett told reporters: “Yes, of course, 100 percent.”

• A U.S. trade team will travel to Beijing the week of Jan. 7 to hold talks with Chinese officials, Bloomberg reported on Wednesday, citing two people familiar with the matter.

The delegation will be led by Deputy U.S. Trade Representative Jeffrey Gerrish and will include David Malpass, Treasury under secretary for international affairs, Bloomberg said.

• Germany’s leading industry groups said on Wednesday that Britain’s departure from the European Union and trade disputes triggered by U.S. President Donald Trump’s ‘America First’ policies were posing the biggest risks to growth and prosperity.

The German economy, Europe’s largest, is expected to post its weakest growth rate in many years in 2018 as exporters are facing headwinds from abroad. But vibrant domestic demand means many companies are still able to expand the business.

• Oil surged on Wednesday, posting its strongest daily gain in more than two years in a partial rebound from steep losses that pushed crude benchmarks to lows not seen since2017.

U.S. crude CLc1 settled at $46.22 a barrel, up $3.69, or 8.7 percent. Even with the day’s gains, U.S. crude has still lost nearly 40 percent from its October closing high at more than$76 a barrel.

Brent crude LCOc1, the global benchmark, rose $4, or 8 percent, to settle at $54.47 a barrel. It earlier fell to $49.93, lowest since July 2017.

“The market is still really concerned about demand,” said Bernadette Johnson, vice president in market intelligence at DrillingInfo in Denver. The sell-off “doesn’t signal strength of confidence in demand, but we still went too far too quick. We still believe $45 is too low.”

Reference: CNBC, Reuters