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·         The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.390 after seeing a lows around 96.0yesterday.

The Japanese yen traded at 109.88 against the dollar after seeing highs around 109.54 in the previous session.

·         The Federal Reserve’s next move may well be an interest rate cut if weakening growth around the world starts infecting the U.S. economy, former central bank Chair Janet Yellen said Wednesday.

Weakening economies in China and Europe are posing danger to an otherwise strong U.S. economy, Yellen told CNBC’s Steve Liesman during a “Power Lunch ” interview.

“Of course it’s possible. If global growth really weakens and that spills over to the United States where financial conditions tighten more and we do see a weakening in the U.S. economy, it’s certainly possible that the next move is a cut,” she said. “But both outcomes are possible.”

·         A “downdraft” in the Chinese economy and the effect of ongoing trade negotiations are among the top concerns in the global economy, though U.S. growth is still solid, a Federal Reserve governor said on Wednesday.

Randal Quarles, the Fed’s vice chairman for supervision, said at an event in New York that he is most focused on how global growth evolves over the next three to six months and how U.S. trade policy affects China and Europe.

“Right now China is a downdraft as we think about what the potential impact for that is on our economy.” The U.S. outlook “is still very solid” given the labor market in particular.

 

·         Federal Reserve Chairman Jerome Powell said on Wednesday the U.S. economy remains in a good place and has proved resilient so far to shocks like the British decision to leave the European Union.

“The U.S. economy is now in a good place,” with low unemployment and inflation near the Fed’s 2 percent target, Powell said in a question-and-answer session with economics educators in Washington and telecast to Fed branches nationwide. “We’ve had some big events, some surprises like Brexit...and the system has been strong,” he said.

 

·         U.S. Treasury Secretary Steven Mnuchin said on Wednesday that he and other U.S. officials will travel to Beijing next week for trade talks, aiming to clinch a deal to avert a March 2 increase in U.S. tariffs on Chinese goods.

Mnuchin said in an interview with CNBC that the talks he and U.S. Trade Representative Robert Lighthizer led in Washington last week with China’s Vice Premier Liu He were “very productive.”

“Ambassador Lighthizer and myself and a large team are on our way to Beijing next week. We are committed to continue these talks,” Mnuchin said. “We’re putting in an enormous amount of effort to try to hit this deadline and get a deal. So that’s our objective.”

·         Treasury Secretary Steven Mnuchin expressed confidence on Wednesday in the progress of trade talks with China and said he and a U.S. delegation are heading to China next week with the intent to make a deal before a March deadline.

“We are committed to continue these talks,” Mnuchin said on CNBC’s “Squawk Box. ” “We’re putting in an enormous amount of effort to hit this deadline and get a deal. That’s our objective.”

 

·         The U.S. Commerce Department’s Census Bureau said on Wednesday it would release December’s retail sales report on Feb 14.

The agency said in a statement that it would also publish the report for December on Feb. 21 and housing starts data for the same month on Feb. 26. It will release the December new home sales report on March 5 and data on December construction on March 4.

These reports were delayed by the recent five-week partial shutdown of the federal government.

·         The Bank of England looks set to trim its forecasts for Britain’s already sluggish growth on Thursday, reflecting the approach of a still uncertain Brexit in just 50 days’ time and a slowdown in many of the world’s big economies.

But the BoE is also likely to strike a contrasting note to the U.S. Federal Reserve by reminding investors that it still intends to raise interest rates, if Britain can avoid the shock of an abrupt no-deal departure from the European Union.

With a transition deal still not in the bag, the BoE’s rate-setters are expected to vote unanimously to keep their benchmark borrowing rate at 0.75 percent, according to a Reuters poll of economists.

“The Monetary Policy Committee (MPC) is clearly in ‘wait and see’ mode,” Howard Archer, an economist with EY Item Club, a forecasting firm, said.

·         British Prime Minister Theresa May is preparing to delay the second parliament vote on her Brexit deal until the end of February, the Telegraph newspaper reported late on Wednesday.

The prime minister’s chief enforcer, or whip, indicated at a cabinet meeting on Tuesday that the vote would not be held next week as expected because May will not have renegotiated her deal in time, the report said, without citing its sources.

Last month, British lawmakers rejected May’s original deal that set out the terms by which Britain would exit the European Union. They voted to demand May seek changes to the treaty.

But the EU has will make no new offer, European Council President Donald Tusk said on Wednesday.

·         Oil prices rose on Wednesday, boosted by signs of strong U.S. demand for distillate products and tightening global crude supply.

But gains were capped by a rising U.S. dollar and ongoing concerns about a global economic slowdown.

U.S. West Texas Intermediate crude futures settled 35 cents higher at $54.01 a barrel on Wednesday, after posting a session low of $52.86.

Benchmark Brent crude futures rose 64 cents, or 1 percent, to $62.62 a barrel around 2:25 p.m. EST. The benchmark earlier fell to a session low of $61.05 a barrel.

Reference: CNBC, Reuters