What you need2know

SPI futures up 7pts or 0.1% to 5498 at about 6.15am

AUD at 75.05 US cents, 78.52 Japanese yen, 68.30 Euro cents and 57.13 British pence

On Wall St, Dow -0.1%, S&P 500 flat, Nasdaq +0.2%

In Europe, Stoxx 50 +0.2%, FTSE +0.2%, CAC +0.2%, DAX +0.5%

Spot gold +0.3% to $US1319.94 an ounce

Brent crude +0.4% to $US44.89 a barrel

Iron ore +2.2% to $US58.08 per tonne

What's on today

Inflation data  @1130

Currencies

The yen strengthened 1 per cent to 104.72 per US dollar, on pace for its biggest gain since June 24. That's the day the UK announced it had voted to exit the European Union, sending investors scrambling for havens and pushing the Japanese currency to a 2 1/2-year high of 99.02 to the dollar.

Allianz SE's Mohamed El-Erian said Federal Reserve policymakers must be aware of the diminishing returns of keeping interest rates so low and need to be aware of the possibility of "unintended consequences" from their approach.

"If the Fed continues with interest rates being too low, it risks causing collateral damage," El-Erian, Allianz's chief economic adviser, said Tuesday in a Bloomberg Television interview. "The more the structural headwinds, the less effective central banks' stimulus is. It's ironic, but this is a recognition that is now spreading within the Fed."

Commodities

Oil fell to a three-month low in New York as supplies were considered to be plentiful even as stockpiles were seen deepening a record pullback in the US. Brent for September settlement rose 15 cents to close at $US44.87 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude ended the session at a $US1.95 premium to WTI.

While US crude inventories probably slid by 2.25 million barrels, gasoline supplies are seen increasing by 600,000 barrels, swelling stockpiles that are also at the highest in decades, according to a Bloomberg survey before an Energy Information Administration report Wednesday.

Gold climbed as investors scaled back expectations for extra stimulus from Japan's government, boosting the yen and weakening the dollar. Bullion for immediate delivery rose 0.5 per cent to $US1.321.89 an ounce, after losing 1.2 per cent in two days.

United States

US stocks were mixed on Tuesday as Federal Reserve policymakers kicked off a two-day interest rate meeting and investors braced for quarterly scorecards from Apple and Twitter. Choppy stock trading followed a recent rally to consecutive record highs on the S&P 500 that has stretched price-to-earnings multiples to levels that some investors say presumes that companies will beat second-quarter estimates.

Five of the 10 major S&P sectors rose, while a 1.49 per cent drop in the telecom services index weighed heavily. Verizon Communications fell 1.9 per cent after subscriber numbers fell below estimates.

After the closing bell, Apple reported lower sales and forecast a third straight quarterly revenue drop, dragged down by slowing demand for iPhones amid a lacklustre global smartphone market and intensifying competition in China. Fourth-quarter revenue will be $US45.5 billion to $US47.5 billion, the Cupertino, California-based company said Tuesday in a statement. On average, analysts projected $US45.5 billion. A year earlier, sales were $US51.5 billion. Still it's shares were up as it sold more phones in the latest quarter than analysts' expected.

Twitter's second quarter earnings per share and monthly active users beat estimates, but the company cut its third quarter forecast, sending shares lower.

McDonald's sank after reporting worse-than-expected quarterly sales at established US restaurants. The stock weighed the most on the Dow.

Europe

The Stoxx Europe 600 climbed 0.1 per cent, as the index struggled for direction for a fourth day, swinging between gains and losses amid earnings reports. A rebound that took it to a one-month high last week has stalled, with the gauge trading in a range of less than one point for the past three days amid thin volume. BP Plc lost 1.3 per cent as cheaper oil and weak refining margins weighed on results.

What happened yesterday

Shares posted a small gain on Tuesday despite spending most of the day in the red, dragged by weakness in energy stocks and a retreat from Woolworths after its blockbuster Monday.

Despite falling below 5500 points in early trade, the S&P/ASX 200 managed to claw back all of its losses by close of trade, crossing into positive territory just before close and ending 4 points higher to 5537.5.

The broader All Ordinaries index finished up 0.1 per cent or 5 points to 5612.6.

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