Local shares appear set to drift higher at the open, though positive sentiment waned somewhat on Wall Street with the exception of interest in the iPhone maker. Apple shares were more than 6 per cent higher as brokers seemingly trampled each other to lift price targets on the stock.

Besides Apple though, and despite generally positive earnings results so far, investors appear increasingly wary of US stocks given the rocky start to the Trump administration. There was no new broadsides against any particular sector overnight, and no fresh jawboning of the US dollar either. Fresh as in nothing in the last few hours.

The next potential catalyst for investors is the Fed's policy statement, released at 6am AEDT. Federal Reserve officials left interest rates unchanged while acknowledging rising confidence among consumers and businesses following Donald Trump's election victory.

"Measures of consumer and business sentiment have improved of late," the Federal Open Market Committee said.

The FOMC repeated that it anticipates interest rates will rise gradually. The statement said job gains "remained solid" and the unemployment rate "stayed near its recent low," a tweak from December's language that the rate "has declined".

"Inflation increased in recent quarters but is still below the committee's 2 per cent longer-run objective," the Fed said. Market-based measures of inflation compensation are "still low," the central bank said, after saying in December that such measures had "moved up considerably."

While the latest reports on manufacturing activity across the world pointed to momentum carrying over from 2016, political risks in particular have heightened with Donald Trump's protectionist "America First" proclamation and renewed Brexit concerns. A law approving the triggering of Article 50, the UK's get out of the euro zone ticket, is set to pass later this morning (in a Wednesday evening vote in London).

Metals prices were mixed overnight, still mostly holding near multi-year highs in light trading with many Chinese buyers still out of the market marking the start of the Lunar New Year.

Locally it's trade data day. Here's what NAB is expecting: "For the trade balance, another monthly improvement is likely with the consensus looking for a $2bn surplus. NAB is on the high side in expecting a $3bn surplus, which if it eventuates would make it Australia's largest ever monthly trade surplus. There are good reasons to expect a bumper outcome given soaring iron ore and coal loadings at key ports in December, along with the recent moves in commodity prices. With coking coal prices remaining at high levels, it is likely Australia will continue to record trade surpluses for at least the first half of 2017."

Today's Agenda

Local data: Trade December, Building approvals December; NZ ANZ job ads January

Overseas data: Japan consumer confidence January; ECB publishes economic bulletin; Bank of England policy meeting; Euro zone PPI January

Market Highlights

SPI futures up 9 points or 0.2% to 5608

AUD flat at 75.81 US cents (overnight range 75.52-75.97)

On Wall St, Dow +0.1%, S&P; 500 flat, Nasdaq +0.5%

In New York, BHP -0.5%, Rio +0.4%, Apple +6.1%

In Europe, Stoxx 50 +0.9%, FTSE +0.1%, CAC 1%, DAZ 1.1%

Spot gold -0.5% to $US1204.46 an ounce

Brent crude +0.9% to $US55.70 a barrel

Iron ore flat at $US83.34 a tonne

Thermal coal -0.4% to $US82.7, Coking coal -1.3% to $US168.0

LME aluminium flat at $US1819 a tonne

LME copper -0.7% to $US5947 a tonne

10-year bond yield: US 2.47%, Germany 0.46%, Australia 2.73%

From Today's Financial Review

Chanticleer: Pressure to force super mergers: It's time APRA turned up the heat on super fund trustee boards to force them to do the right thing by their beneficiaries.

Coal, oil demand to peak in three years: Demand for oil and coal is set to peak potentially as early as 2020, leaving some big resources companies with stranded assets.

Xenophon hauls Helou over coals: A full nine months since Gary Helou ran dairy group Murray Goulburn onto the rocks, he semi-emerged from obscurity on Wednesday.

United States

Fed retains optimism on US economy: ​The Federal Reserve kept interest rates unchanged in its first meeting since President Donald Trump took office.

Beware Fed moves to counter inflation: One of the biggest risks to markets is if the US Federal Reserve raises interest rates too quickly to counter runaway inflation.

The Dow pared gains as the session progressed, though Apple's 6.1 per cent surge bolstered the blue-chip index. On the losing side: Microsoft, United Tech and Verizon.

After the closing bell, Facebook said sales jumped 51 per cent to $US8.81 billion, topping the $US8.51 billion average analyst projection. Monthly active users on its main social network reached 1.86 billion people, 1.23 billion of them checking daily and 1.74 billion accessing it via their smartphones.

Sentiment was boosted by a report that showed US private employers added 246,000 jobs in January, the most in seven months, pointing to sustained strength in the labour market. The report acts as a precursor to the more comprehensive nonfarm payrolls report due Friday.

The force behind Apple's latest rally is pushing a key technical indicator past a level that frequently precedes a drop in shares. The 14-day relative strength index, which measures price-movement velocity and can be used to predict turning points, indicated the stock was the most overbought in almost five years. Trading volume in Apple was nearly double the three-month average as investors look forward to the company's fall release of a new iPhone.

Tillerson confirmed as secretary of state: One of the first challenges for the former Exxon CEO will be dealing with the fallout from President Trump's travel ban.

Mexico expects to begin formal talks from around the beginning of May on renegotiating the North American Free Trade Agreement (NAFTA) following a 90-day consultation with the private sector, the government said.

Europe

May moves closer to Brexit trigger: British lawmakers approved legislation seeking parliament's approval for the start of formal divorce talks with the EU.

Siemens and Volvo results lifted European shares to the best gain in a week. The Stoxx Europe 600 Index advanced 0.9 per cent at the close. The Euro Stoxx 50 Index of euro-area equities added 0.9 per cent on Wednesday, bouncing off its 50-day moving average, a key support level.

Volvo shares were among top European gainers, up 4.7 per cent after the car maker substantially outperformed forecasts with a core profit of 5.66 billion Swedish crowns, and raised its forecast for the European truck market.

Shares in German industrial group Siemens hit their highest level since September 2000, after it raised its outlook, with industrial business profit jumping in the fiscal first quarter. Its shares ended up 5.6 per cent.

"Siemens' transformation is under way and we see little reason why the stock would not move more towards a sector multiple," Liberum analysts said in a note, reiterating their 'buy' rating on the stock.

French manufacturing activity expanded at the fastest pace in nearly six years in January as demand firmed up, while German factory growth was the highest in three years, and Italy's also increased, albeit at a slower pace.

Asia

Macau's gross gaming revenue rose 3.1 per cent in January, compared with the median estimate of an 8.5 per cent gain in a Bloomberg survey and an 8 per cent increase in December, data showed Wednesday. Sands China fell 2.2 per cent, while Galaxy Entertainment Group declined 2.7 per cent.

The Hang Seng Index dropped 0.2 per cent to 23,318.39 on Wednesday after markets were closed for 2 1/2 days through Tuesday for Lunar New Year. China's markets are shut through Thursday.

The offshore yuan weakened 0.11 per cent to 6.8351 versus the greenback on Wednesday, paring this week's gain to 0.5 per cent.

In Tokyo, Japanese stocks rose, reversing early declines, as investors focused on corporate profits and the yen retreated from gains. The Nikkei, which was down in early trade, ended 0.6 per cent higher to 19,148.08. The broader Topix gained 0.4 per cent to 1527.77, with 28 of its 33 subsectors in positive territory.

India's equity benchmark advanced more than 1 per cent as the government eased its deficit targets, offered tax cuts and higher spending to cushion the economy. India's milk producers and dairy stocks rose as the budget included a proposal to set up an 80 billion rupee ($US1.2 billion) fund for dairy processing infrastructure while housing developers climbed on a proposal to extend affordable housing program to five years. 

Currencies

Greenback pares gains as Fed signals no rush to lift rates: The US dollar trimmed gains on disappointment that the Fed did not take a more hawkish stance on interest rate increases.

Bill Gross, the billionaire bond investor, says President Donald Trump's policies are fuelling a strong dollar and an undervalued peso that are bad for the US and global economy.

"I think the dollar is a concern," Gross, who manages the $US1.8 billion Janus Global Unconstrained Bond Fund, said. "It is the global currency. To the extent that the dollar strengthens, not only are US companies affected to the negative, the global marketplace and global countries are affected too."

A strong dollar makes US exports less competitive and makes US assets attractive to overseas investors without increasing productivity or real economic growth, according to Gross. The Mexican peso has has fallen 13 per cent since the November 8 election as Trump has advocated for construction of a wall between the two countries and threatened to raise taxes on imports from the US neighbour.

Reserve Bank to cut the cash rate to 1 per cent: Paul Dales: If Paul Dales, the economist who has called the interest rate cycle better than most, is right the RBA will cut the official cash rate to 1 per cent later this year.

The pound was the biggest gainer among Group of 10 nation currencies, advancing 0.5 per cent to $US1.2647; UK manufacturing PMI for January was in line with estimates, hovering near a 2 1/2-year high. Sterling soared by more than 1 per cent against the euro, driven by a combination of solid data and greater political certainty over the Brexit process.

HSBC has advised its clients to sell sterling at $US1.2540 with a target of $US1.2040 and stop loss at $US1.2810, a recommendation from the bank shows.

Capital Economics Jennifer McKeown on Navarro's euro comments: "Arguably what is needed is an internal revaluation and reflation of Germany's domestic economy. We have long argued that if German wage growth gained pace, domestic spending growth would accelerate, boosting demand for exports from countries like Italy, making them more able to compete and promoting rebalancing within the euro-zone. This would also improve the competitiveness of countries outside the euro-zone (including the US) compared to Germany. The most obvious way to achieve this would be through a large fiscal stimulus in Germany."

Still Capital Economics said Germany's competitiveness has been achieved through years of unit labour costs restraint, not currency manipulation, and as such there's little chance Germany will seek an alternate course even after this year's elections.

Commodities

Workers at BHP Billiton's Escondida copper mine in Chile voted against the company's latest wage offer, opening the door for a strike as early as Monday and potentially heralding a wave of stoppages at global suppliers after a rally. 

Three-month copper on the London Metal Exchange closed down 0.7 per cent at $US5947 a tonne, having earlier touched a two-month peak of $US6007.

Zinc closed up 0.7 per cent at $US2880 a tonne after hitting a two-month peak earlier. LME zinc stocks are near their lowest level since June last year.

Aluminium ended flat at $US1819, while nickel closed up 3 per cent at $US10,250 after rising by 3 per cent in the previous session.

Tin closed up 0.1 per cent at $US19,850 while lead closed down 1.6 per cent at $US2333 a tonne.

Oil rallies late to settle higher: Crude futures rallied late in New York's day, after briefly trading lower on an earlier, bearish US government report.

Robusta coffee prices on the ICE futures market rose to the highest level in more than five years boosted by investor buying against the backdrop of tightening supplies. Dealers said a continued lack of hedge selling, with top robusta producer Vietnam still on holiday for the Lunar New Year, also helped to clear the way for prices to advance. May robusta coffee futures were up $US16 or 0.72 per cent at $US2252 a tonne at 1505 GMT after earlier climbing to a peak of $US2279, the highest for the second position since September 2011.

Australian Sharemarket

Overall, the benchmark S&P;/ASX 200 Index and the broader All Ordinaries Index rose 0.6 per cent and 0.5 per cent to 5653.2 points and 5704 points respectively.

Shares in iron ore producer Fortescue Metals soared to their highest in six years at $6.97 following a number of broker upgrades to their share price targets, before trimming some of the gains to close up 2.3 per cent at $6.81. The miner said on Tuesday it's on track for to meet the top end of its iron ore production forecast for the year, as demand and prices for the bulk commodity exceed market expectations.

​Street Talk

All aboard the pet care, veterinary rationalisation cycle: Vetfriends and VetPartners are circling Mercury Capital's Australian Animal Hospitals business.

Macquarie loses small cap managers James Dougherty, Liam Donohue: Macquarie Asset Management has lost well-known small cap portfolio managers James Dougherty and Liam Donohue, sources told Street Talk.

Bids due for OfficeMax: Office Depot, the largest office supplies chain in the United States, will have a bird's-eye view of Australia's turnaround and private equity industry on Thursday.

with Reuters, Bloomberg, AAP

Comments? Questions? Let us know what you think of Before the Bell. You can reach Timothy Moore at  timothy.moore@fairfaxmedia.com.au