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Today, The People's Bank of China injected CNY40 billion via seven-day reverse repos at open-market operations. Total, this week PBOC injected CNY240 billion into open-market operations.

A total of CNY960 billion in outstanding reverse repos matures this week including CNY10 billion Wednesday.

Fed Vice Chairman Stanley Fischer said Fed officials " simply do not know" what course of action they will take at their next meeting three weeks from now, and it is too early to assess the impact of market volatility.

"If the recent financial market developments lead to a sustained tightening of financial conditions, they could signal a slowing in the global economy that could affect growth and inflation in the United States," Fischer said.

"But we have seen similar periods of volatility in recent years--including in the second half of 2011--that have left little visible imprint on the economy, and it is still early to judge the ramifications of the increased market volatility of the first seven weeks of 2016."

Fischer said the Fed is looking at negative rates although there were no plans to use them.

On the heels of a sizable December gain, existing home sales continued to pick up in January, rising to a 5.47 million-unit pace. Tight supply levels may restrain sales in coming months, however.

While total housing inventory rose 3.4 percent during the month, inventories remain exceptionally lean and are still 2.2 percent below their year-ago level. Ongoing supply constraints have kept home prices firm, with the median single-family home price up 8.3 percent over the year

After maintaining momentum in January, the volatility in equity markets appears to have adversely affected consumers’ assessment of the current economic landscape. Consumers’ view of the future also pulled back.

February’s reading of consumer confidence showed that consumers’ views of both the current and future economic situation deteriorated over the past month. The headline index fell to 92.2 from January’s 97.8 reading. Consumers’ views of the present situation fell to 112.1 from January’s 116.6, while the future expectations component fell to 78.9 from 85.3. In the current environment, slightly more respondents viewed employment as hard to get and slightly more respondents labeled current business conditions as bad. Consumers’ views of inflation remained relatively stable for the month at 4.7 percent from January’s 4.8 percent.

While the pullback in confidence is a bit concerning, it will likely take more than one month of soft confidence data to have a dramatic effect on real consumer spending. Given January’s solid retail sales report, we maintain our view of real consumer spending in the first quarter somewhere around 3 percent.

Wells Fargo said. “We do admit, however, that should equity market sell-offs continue in the months ahead, there could be a further erosion in consumer confidence and, in turn, a slower pace of real consumer spending. Over the course of the next several months, we see the psychological effect of continued equity market sell-offs as one of the largest risks to our current economic outlook.”

Oil prices slid on Wednesday, extending sharp falls from the previous session after top exporter Saudi Arabia ruled out production cuts and industry data showed a further build in U.S. crude stockpiles.

Meanwhile, Iran made clear it has no interest in restraining production after sanctions against it were lifted, calling a joint Russian/Saudi proposal for major exporters to freeze output "laughable".

U.S. crude futures CLc1 were trading at $31.38 per barrel at 0526 GMT, down 1.54 percent from their last settlement. International Brent futures LCOc1 were down 0.72 percent at $33.03 a barrel. Both dropped more than 5 percent the previous day.

The falls were a result of an apparent lack in cooperation among members of the Organization of the Petroleum Exporting Countries (OPEC) to freeze or cut production and rein in overproduction that has pulled down prices by 70 percent since mid-2014.

Ric Spooner, chief strategist at CMC Markets, said there was a risk oil prices could drop further as there was "no realistic prospect of a production agreement" and because of the upcoming low demand spring season in the northern hemisphere.

The American Petroleum Institute (API) said crude inventories rose 7.1 million barrels in the week to Feb. 19 to 506.2 million, far exceeding expectations of a 3.4 million barrels rise.

The U.S. Energy Information Administration will report official inventory data later on Wednesday.

Reference: PBOC, Reuters, MNI News, CNBC, Wells Fargo’s Economic Indicators Report