Investors batten down ahead of Fed minutes

Global shares have changed little as investors kept their eyes peeled for the minutes of a Federal Reserve meeting that could shed light on whether the US central bank was considering moderating interest rate hikes.

The Fed has raised rates significantly in a bid to curb surging inflation, and New Zealand's central bank earlier increased interest rates by a record 75 basis points to 4.25 per cent, a harbinger of more likely hikes from the Federal Reserve, European Central Bank and Bank of England next month.

"There is an expectation that the Fed is probably closer to end of rate hiking cycle than the beginning, certainly to the extent of the rate hikes, the bulk are behind them," said Mike Hewson, chief markets analyst at CMC Markets.

"There is very little interest heading into the Thanksgiving weekend, and consequently markets are drifting higher on inertia. If you have made your money this year, are most probably done," Hewson said.

US markets are closed on Thursday for Thanksgiving. The minutes of the Fed's Nov. meeting are due out on Wednesday.

The MSCI All Country stock index was up 0.12 per cent on Wednesday, though it still down about 18 per cent for the year.

In Europe, the STOXX index of 600 companies was up 0.1 per cent, leaving it off about 10 per cent for 2022. US stock futures, the S&P 500 e-minis, were slightly firmer.

David Bizer, managing partner at investment manager Global Customised Wealth, said investors were being guided by what they think the Fed would do next, as signs of a slowdown in the U.S economy become clearer.

"The appreciation in markets overall in the fourth quarter is driven by this belief that the Fed is awakening to the fact that the pace and magnitude of their rate increases might have a near term conclusion. It gives the markets confidence that this is going to be the end," Bizer said.

The downturn in euro zone business activity eased slightly in November but overall demand continued to decline as consumers cut spending amid a cost of living crisis, data showed, adding to evidence the currency bloc is entering recession.

In China, authorities imposed restrictions to rein in a rapid rise in COVID-19 infections, compounding investor worries about the world's second-largest economy.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent, buoyed by gains in US stocks overnight. The index is up 12 per cent so far this month.

Hong Kong's Hang Seng Index was up 0.6 per cent, while China's CSI300 Index gained 0.1 per cent.

The yield on benchmark 10-year Treasury notes traded at 3.7483 per cent compared with its US close of 3.758 per cent on Tuesday.

The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 4.5269 per cent compared with a US close of 4.517 per cent.

Ahead of the Fed minutes, the dollar index was up 0.019 per cent.

The euro single currency was also slightly firmer on the day at $US1.0312.

Oil prices inched higher as data showed a larger-than-expected US crude drawdown last eek, outweighing concerns about lower fuel demand from China.

US crude was up 0.8 per cent at a $US81.59 a barrel, while Brent crude gained 1 per cent to $US89.23 a barrel.

Spot gold was traded at $US1,737 per ounce, down 0.16 per cent on the day.