Catalonia relief pushes euro higher; Fed minutes keep U.S. stocks up

Marc Jones, Reuters

Pro-independence supporters during a rally as they watch Catalan President Carles Puigdemont speaking in parliament, on a giant screen in Barcelona, Spain, Tuesday, Oct. 10, 2017. Puigdemont said the region remained committed to independence but said it should follow dialogue with the government in Madrid. , AP Photo/Felipe Dana

U.S. Treasury prices and stocks worldwide were little changed on Wednesday after minutes from the Federal Reserve's September policy meeting were in line with expectations, while the euro was higher after Catalonia held off on moving to independence.

The euro move helped push the dollar index down for the fourth day in row. The dollar briefly extended its drop after Fed minutes showed that policymakers had a prolonged debate about the prospects of a pickup in inflation and the path of future interest rate rises if it did not.

Wall Street's major stock indexes clung to small gains as a jump in shares of defensive sectors such as utilities was offset by declines in sectors such as financials a day before the start of the quarterly corporate reporting season.

"Third-quarter results of large banks are expected to be tepid," said Stephen Biggar, an analyst at Argus Research. "Trading revenue (will be) down due to low volatility and loan growth remaining flat to slightly negative."

The Dow Jones Industrial Average rose 42.21 points, or 0.18 per cent, to 22,872.89, the S&P 500 gained 4.6 points, or 0.18 per cent, to 2,555.24 and the Nasdaq Composite added 16.30 points, or 0.25 per cent, to 6,603.55.

Stocks ended near session highs after Politico reported that Treasury Secretary Steven Mnuchin was pushing president Donald Trump to name Jerome Powell, seen as a safe pick for financial markets, as the next Federal Reserve chairman.

The euro reached a roughly two-week high after Catalonia's leader, Carles Puigdemont, declined to make a formal independence declaration on Tuesday to allow for talks with Madrid. That disappointed many pro-independence supporters but pleased financial markets.

A 1.3-percent jump in Spain's IBEX more than reversed the previous session's fall while the broader equities market showed a lackluster performance.

The pan-European FTSEurofirst 300 index lost 0.01 per cent and MSCI's gauge of stocks across the globe gained 0.16 per cent.

Meanwhile, the dollar index fell 0.33 per cent, with the euro up 0.4 per cent to US$1.1853.

It was also affected by U.S. President Donald Trump's spat with Tennessee Senator Bob Corker - an influential fellow Republican - which raised concerns that Trump's tax reform push may be in jeopardy.

U.S. Treasuries were little changed after the Fed minutes and after the Treasury Department saw solid demand for three-year and 10-year note supply.

Benchmark 10-year notes were virtually unchanged in price to yield 2.3445 per cent, from 2.345 per cent late on Tuesday.

The 30-year bond was last up 3/32 in price to yield 2.8768 per cent, from 2.881 per cent late on Tuesday.

Oil prices were virtually unchanged on Wednesday as Saudi Arabia said it pumped more in September than in August, even as OPEC forecast higher demand for 2018.

U.S. crude rose 0.73 percent to US$51.29 per barrel and Brent was last at US$56.88, up 0.48 per cent.

Gold prices were barely up after declining in the previous session. Spot gold <XAU=> added 0.2 percent to $1,289.80 an ounce.