Oil and bitcoin glow higher, stocks cowed

Oil prices and bitcoin shot higher on Wednesday, while stocks were subdued ahead of crucial China-US trade talks.

Gold prices were held back as the dollar spent most of the day higher, which makes it more expensive for buyers of the dollar-denominated metal using other currencies.

The precious metal has hit near six-year highs in recent days as investors sought safe haven assets amid rising tensions between Iran and the United States.

The dollar wobbled as the currency market tried to guess and second-guess the US Federal Reserve's next move.

On Tuesday, top Federal Reserve officials dented hopes for a big cut in US interest rates, after having last week raised expectations that the central bank would soon announce its first rate reduction in more than a decade following downbeat US economic data.

Data released Wednesday showed US durable goods orders fell in May, helping push the closely watched economic indicator to its lowest level in 16 months and reinforcing the case for a rate cut.

But the Fed is concerned about demonstrating its independence as US President Donald Trump steps up political pressure by ridiculing Fed boss Jerome Powell -- saying the United States would do better under Mario Draghi, the current European Central Bank chief.

That raised uncertainty about which course the bank would take.

Meanwhile, with Trump and Chinese counterpart Xi Jinping due to meet on the sidelines of the G20 summit in Japan later this week, stock markets got a brief boost from comments from Treasury Secretary Steven Mnuchin that suggested a US-China trade deal was 90 percent done.

"The only problem is that, a month ago, the two sides were only five percent away from a deal," said Chris Beauchamp, chief market analyst at online trading firm IG.

"Thus the bounce has been relatively short-lived, with the mood music suggesting that neither side is aiming to come away with a deal, and indeed both are preparing for more tariffs and further conflict," he added.

Trump, who has already hit $200 billion of Chinese imports with levies in an effort to force Beijing into making a deal, warned China Wednesday of an even deeper trade war, by indicating he is ready to slap tariffs on more than $300 billion worth of remaining goods.

European markets closed mixed while US markets were up heading into midday trades.

A drop in US crude stockpiles have provided support to oil prices meanwhile.

"WTI and Brent crude surged after the Energy Information Administration report showed a huge drop in US inventories," noted market analyst David Madden at CMC Markets UK.

Concerns about demand have recently weighed on crude prices.

Elsewhere on Wednesday, bitcoin surged to an 18-month high close to $13,000 on continued demand after Facebook recently unveiled plans for its own cryptocurrency.

Key figures around 1530 GMT
Euro/dollar: UP at $1.1379 from $1.1370 at 2050 GMT

Pound/dollar: DOWN at $1.2688 from $1.2692

Dollar/yen: UP at 107.67 yen from 107.18

London - FTSE 100: DOWN less than 0.1 percent at 7,416.93 points (close)

Frankfurt - DAX 30: UP 0.1 percent at 12,245.32 (close)

Paris - CAC 40: DOWN 0.3 at 5,500.72 (close)

EURO STOXX 50: DOWN less than 0.1 percent at 3,441.72

New York - Dow: UP 0.2 percent at 26,609.10

Tokyo - Nikkei 225: DOWN 0.5 percent at 21,086.59 (close)

Hong Kong - Hang Seng: UP 0.1 percent at 28,221.98 (close)

Shanghai - Composite: DOWN 0.2 percent at 2,976.28 (close)

Brent North Sea crude: UP $1.29 at $66.34 per barrel

West Texas Intermediate: UP $1.53 at $59.36 per barrel

Gold: DOWN at $1,413.20 per ounce from $1,414.24

Bitcoin - UP at $12,776 from $11,402