• While the Fed still has another hike penciled in for this year, a recent run of soft inflation data has left fund futures <0#FF:> implying only a 40 percent chance of a move by December. This leaves the market vulnerable to any hawkish spin from the Fed, which would likely slug Treasury prices while lifting the embattled U.S. dollar.
Against a basket of currencies, the dollar was a whisker firmer on Wednesday at 97.016 .DXY and little changed on the Japanese yen at 110.04 JPY=.
• U.S. producer prices were unchanged in May as energy costs recorded their biggest decline in more than a year, suggesting a moderation in inflation after a rise at the start of the year.
Inflation at the factory gate, however, remains supported by sustained increases in the cost of services as well as a softening dollar, which is lifting prices of some imported goods.
• U.S. Attorney General Jeff Sessions on Tuesday denounced as a "detestable lie" the idea he colluded with Russian meddling in the 2016 presidential election, and he clashed with Democratic lawmakers over his refusal to detail his conversations with President Donald Trump.
Sessions, a senior member of Trump's Cabinet and an adviser to his election team, had a series of tense exchanges with Democrats on the Senate Intelligence Committee during about 2-1/2 hours of high-stakes testimony as they pressed him to recount discussions with the Republican president.
• Britain entered a sixth day of political limbo on Wednesday with Prime Minister Theresa May yet to seal a deal to prop up her minority government and facing calls to soften her stance on Brexit days before negotiations on leaving the EU begin.
• Oil prices settled higher on Tuesday after OPEC detailed supply cuts around the world, but the cartel also said overall production rose in May, and crude stayed well below $50 a barrel despite the modest recovery.
Following the close, crude prices slipped after industry group the American Petroleum Institute said crude stocks rose by a surprising 2.8 million barrels for the week to June 9, counter to forecasts for a 2.7 million-barrel drawdown.
Benchmark Brent crude LCOc1 settled 43 cents higher at $48.72 a barrel while U.S. light crude CLc1 settled up 38 cents to $46.46 a barrel.
• The market will watch to see whether the API data is confirmed by official figures due Wednesday morning from the U.S. Energy Information Administration (EIA).
• The world's top exporter Saudi Arabia outlined cuts to customers in July that included a reduction of300,000 barrels per day (bpd) to Asia as well as deeper cuts in allocations to the United States.
Reference: Reuters
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