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·         U.S. government debt yields rose on Tuesday after federal lawmakers reached a deal to fund the government and avoid a repeat shutdown.

At around 10:00 a.m. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 2.679 percent, while the yield on the 30-year Treasury bond was also higher at 3.019 percent.

Market sentiment got a boost on news U.S. lawmakers had secured a tentative deal on border security funding on Monday. The drafted agreement — which congressional aides said did not contain funds for a border wall — could help avert another partial government shutdown due to begin from Saturday.

A congressional source told CNBC it would put about $1.4 billion toward physical barriers, but not a wall, a provision President Donald Trump has insisted upon in prior deliberations. The deal would include about 55 new miles of bollard fencing and reduce the cap for Immigration and Customs Enforcement detention beds by about 17 percent.

Any agreement will need to be approved by Trump.

·         President Donald Trump said on Tuesday he was unhappy with a deal struck by congressional negotiators on border security that denied him funds for his promised U.S.-Mexican border wall, but did not reject it outright as fellow Republicans urged his support.

·         The dollar edged lower against its peers on Wednesday, as rising expectations of a breakthrough in the trade impasse between United States and China led investors to put money into the euro and Asian currencies.

The euro gained 0.1 percent to $1.1334, while high-beta currencies such as the Aussie dollar and kiwi dollar each firmed 0.1 percent to $0.7102 and $0.6742, respectively.

“We seem to have moved away from dollar dominance over the last two sessions...this weakness is directly related to the improving risk sentiment around trade,” said Michael McCarthy, chief markets strategist at CMC Markets.

“The euro has bounced off an important support level and can extend its gains.”

The dollar index, a gauge of its value versus six major peers, was marginally lower at 96.65 having lost 0.35 percent on Tuesday. The dollar was flat versus the yen at 110.50.

·         President Donald Trump said Tuesday that he would consider postponing the March 2 deadline for tariffs if the U.S. and China can reach a trade deal soon.

Trump softened his stance on the trade battle with China, saying he's open to letting the deadline slide, but "would prefer not to." He also said Beijing "very much wants to make a deal," and he has "a big team" in China trying to reach a resolution.

When asked if he will meet Chinese President Xi Jinping at the end of March, Trump said, "Not at this point."

 

·         Decades of bank industry consolidation have weighed on the economies of rural areas as branches and local community banks disappeared and access to financial services declined, Federal Reserve Chairman Jerome Powell said on Tuesday, citing meetings of Fed staff held last year in communities where banks had closed.

The trend is likely stunting business and consumer lending, particularly for already poor and isolated communities, Powell said at a conference at Mississippi Valley State University addressing ways to improve financial services and reduce poverty levels in rural

 

·         Russia said on Tuesday it was ready to facilitate the start of dialogue between Venezuela’s government and opposition but warned the United States against intervening in Caracas’ internal affairs.

·         Oil prices were more than 1 percent on Tuesday on steep OPEC production cuts and Saudi Arabia's plan to drop March crude output by more than a half a million barrels per day below its pledge.

Rising investor optimism for a breakthrough in the latest round of U.S.-China trade discussions also boosted futures.

International benchmark Brent crude futures were up 81 cents, or 1.3 percent, at $62.32 a barrel around 2:30 p.m. ET. U.S. West Texas Intermediate crude oil futures ended Tuesday's session up 69 cents, or 1.3 percent, at $53.10a barrel.

·         Production cuts implemented Jan. 1 by OPEC and allies led by Russia have tightened markets in the face of rising output in non-member countries, including the United States.

OPEC said on Tuesday it had reduced oil production almost 800,000 bpd in January to 30.81 million bpd under its voluntary global supply pact.

Saudi Energy Minister Khalid al-Falih told the Financial Times that the kingdom would reduce production to about 9.8 million bpd in March to bolster oil prices.

Reference: CNBC, Reuters