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Top 5 Things to Know in the Market on Wednesday

Investing.com - Here are the top five things you need to know in financial markets on Wednesday, Jan. 9: 1. U.S.-China

Investing.com - Here are the top five things you need to know in financial markets on Wednesday, Jan. 9:

1. U.S.-China trade negotiations end on optimistic note

The U.S. and China ended a third day of trade negotiations - extended from the initially planned two days of talks - on an optimistic note Wednesday.

Chinese foreign ministry spokesman Lu Kang said that the extra day of discussions was a sign that both sides were serious about the negotiations and noted that they had made progress despite the fact that some disagreements remain on structural issues.

The meeting of mid-level officials was expected to pave the way for higher level talks between U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu that is reported to take place later this month.

The world’s two largest economies must reach a deal before a Mar. 1 deadline at which time the U.S. will hike tariffs from 10% to 25% on about $200 billion in Chinese goods.

An official communiqué is expected later on Wednesday.

2. Stocks gain on positive end to U.S.-Sino trade talks

The upbeat interpretation of the progress in trade talks between China and the U.S. supported stocks on Wednesday with global indices rising across the board.

Asian stocks closed at a three-and-a-half-week high on hopes that easing tensions would lower the danger of a severe global economic impact.

European equities shared in the relief rally with the broad pan-European Stoxx 600 up around 0.7%

U.S. futures also pressed higher after a solid 1% rise a day earlier. At 5:51 AM ET (10:51 GMT), the blue-chip Dow futures rose 83 points, or 0.35%, S&P 500 futures rose 8 points, or 0.30%, while the Nasdaq 100 futures traded up 26 points, or 0.39%.

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3. Fed in focus with minutes and appearances

On the economic front, all eyes will be on the Federal Reserve as traders peruse the minutes from the last policy meeting and wait for what will be the first day of a deluge of appearances from policymakers.

The minutes of the Fed’s December policy meeting will be released at 2:00 PM ET (19:00 GMT). At the meeting, the Federal Open Market Committee voted to increase interest rates for a fourth time in 2018 and indicated that two more rate hikes this year are likely.

Ahead of the minutes, Atlanta Fed president Raphael Bostic, Chicago Fed chief Charles Evans and Boston Fed president Eric Rosengren are all scheduled for speeches throughout the day.

The appearances will serve as a prelude to an appearance from Fed chairman Jerome Powell who is due to deliver remarks at The Economic Club of Washington on Thursday.

4. Partial U.S. government shutdown continues after Trump press conference

The partial U.S. government shutdown entered a 19th consecutive day on Wednesday after the American president Donald Trump called on Congress to give him $5.7 billion in funding to help build a wall on the U.S. border with Mexico.

Trump said in a prime-time televised speech after Tuesday’s market close that there was a growing security crisis at the U.S.-Mexico border and reiterated that Democrats needed to step up to support the initiative

But Trump stopped short of earlier hints that he could use presidential powers to declare an emergency as a first step toward directing money for the wall without congressional approval.

Senate Democratic leader Chuck Schumer and House of Representatives Speaker Nancy Pelosi delivered televised rebuttals to Trump's speech, arguing that the wall would be ineffective and too costly.

5. Bank of Canada expected to hold on interest rates

The Bank of Canada is widely expected to keep interest rates on hold and reiterate its plan to raise them gradually. The decision is due at 10:00AM ET (15:00 GMT) on Wednesday with a press conference to follow an hour later.

“Rates aren't in the focus but the statement will have to address lower exports, cheaper oil and slower global growth. At the same time, (BoC governor Stephen) Poloz is consistently optimistic and he could try to retain a hawkish bias,” Investing.com analyst Ashraf Laidi said.

The bank held steady at its Dec. 5 meeting and suggested the pace of future hikes could be more gradual, citing disappointing growth and low oil prices.

Poloz said in mid-December that the pace of interest rate hikes in Canada could be interrupted or sped up depending on the economic circumstances.

-- Reuters contributed to this report.