U.S. stocks tumbled to three-month lows, following equities around the world after China weakened its currency, stoking investor concern that a slowdown in the world's second-largest economy will damp global growth.

Energy and raw-material companies in the Standard & Poor's 500 Index led the selloff, losing at least 2.6 percent as China's move revived the angst that sent financial markets into turmoil last summer. Chevron Corp. declined 3.9 percent, while copper producer Freeport-McMoRan Inc. slid 8 percent. Six of the benchmark's 10 main industries dropped at least 1 percent.

The S&P 500 lost 1.3 percent to 1,990.40 at 4 p.m. in New York, trimming a drop of as much as 1.9 percent while sliding to its lowest level since Oct. 6.

China's central bank set the yuan's reference rate at an unexpectedly weak level, adding to anxiety about an economic slowdown that has dominated markets this week. The S&P 500 on Monday kicked off 2016 with its worst start in 15 years. Adding to geopolitical worries, North Korea claims it successfully tested its first hydrogen bomb, which follows a recent buildup of tension between Saudi Arabia and Iran.

Commodity producers fell amid speculation that weakness in China would weigh on demand for raw materials. Brent crude oil dropped below $35 a barrel to its lowest since 2004, while West Texas Intermediate futures lost more than 5 percent. Apache Corp. and Murphy Oil Corp. tumbled 11 percent to the steepest losses in seven years.

China's currency devaluation last August triggered a global rout that drove the S&P 500 to its first correction in four years, after it had reached an all-time high as recently as May. Now, UBS Group AG's technical strategists predict the U.S. benchmark will enter a bear market as early as this year.

Weak Beginning

The S&P 500 has fallen 2.6 percent in the first three days of the year. That's better than the 2.7 percent plunge to start 2015, which marked the worst opening since 2008. The index swung wildly last January before ending the month lower by 3.1 percent. The poor start to 2016 has left the benchmark index 6.6 percent below its all-time high set in May.

Sentiment has turned more cautious on stocks after the Federal Reserve's first interest-rate increase since 2006 and forecasts for little to no growth in corporate earnings until March. Fed officials have stressed that while the pace of future hikes will be gradual, it will depend on progress in economic data.

Equities offered little reaction to the Fed's latest meeting minutes, which showed some policy makers saw the decision to raise interest rates as a "close call." Minutes from the December gathering said "almost all" of the rate-setting committee's participants were satisfied the criteria for tighter policy had been met.

Data Wednesday showed companies added more workers than projected in December, indicating the job market had momentum as 2015 came to a close. A separate report showed service companies continued to outperform their manufacturing counterparts in December as orders and employment picked up. Other data said factory orders in November fell, in line with forecasts from economists surveyed by Bloomberg.

The US dollar rose against other currencies, as investors favored safe-haven against the backdrop of renewed concerns about the prospects for China's economy, the news about the likely bomb test by North Korea, as well as the fall in oil prices.

In the first trading days of 2016, investors preferred the dollar, given the new signs of weakness in China and the euro zone. On Wednesday, new data have been published that indicate that the Chinese authorities can not cope with a slowing economy. Indicators of activity in the service sector in China, which usually has a positive effect on economic growth, were weak. Partly China is responsible for the drop in oil prices, while the markets spread concerns about the economic situation in the country.

Investors are also faced with the problem of reducing the yuan. On Wednesday, China's central bank set the mid exchange rate at its lowest level in five years.

In addition, on Wednesday, North Korea announced the successful testing of a more perfect form of nuclear weapons, which was another reason why investors preferred safe-haven assets.

More positive-than-expected US data also helped strengthen the dollar.

Data provided by Automatic Data Processing (ADP), have shown that the growth rate of employment in the US private sector has significantly increased in December, despite the expectations of a moderate decline. According to a report last month, the number of employees increased by 257 thousand. People, compared with a revised downward indicator for November at 211 thousand. (Originally reported growth of 217 thousand.). We add, according to the average forecast value of this indicator was to reach 192 thousand.

In addition, the US Commerce Department reported that the trade deficit decreased markedly in November as imports and exports fell to their lowest level in recent years. Last Modified indicates that the volume of world trade is gradually slowing down due to low commodity prices and fluctuations in major currencies.

According to the report, the trade deficit decreased by 5% compared with October, while reaching $ 42.37 billion. Exports fell by 0.9%, while imports dropped even more - by 1.7%, to its lowest level from February 2011. The deficit for October was revised to $ 44.58 from $ 43.89 billion. Economists had expected a deficit of $ 44.0 billion.

The euro rose slightly against the dollar, the currency of support have data on business activity in Germany and the euro zone. It is learned that private sector activity in Germany increased at the end of December, registering with the fastest expansion in 17 months. This was reported in the final report, Markit Economics. The composite index of business activity, which covers the manufacturing sector and the service sector increased to 55.5 points in December against 55.2 in November. Recall previously reported a decline to 54.9 points. The final PMI index for the services sector rose to 56.0 compared with 55.6 in November and preliminary value of 55.4. The last reading was the highest since July 2014.

Meanwhile, the final data, provided by Markit Economics, showed that business activity in the euro zone's private sector grew in December, more than in the previous month, and faster than originally anticipated. The composite PMI index rose to 54.3 in December from 54.2 in November. In a preliminary report, it reported a decline in the index to 54.0. It is worth emphasizing, the index remains above the neutral mark of 50 points for 30 consecutive months and diamonds. PMI for the services sector remained at 54.2 points in December. Previously it reported 53.9 points. Analysts had forecast that the index was 53.9.

The pound fell against the dollar after the publication of weak statistics on Britain. The report CIPS and Markit Economics reported that the index of business activity in the services sector in Britain has decreased moderately in December, but remained above the neutral mark of 50, which indicates expansion. According to the data at the end of December, the PMI index for the services sector fell to 55.5 against 55.9 in November. Analysts had expected the index to fall to 55.6 points. The average value of the index for the 2nd half of 2015 amounted to 55.4 points, which is lower than the same period in 2013 (56.9 points) and 2014 (58.2 points). On average, in 2015 the index was 56.7 points. "The research results indicate that the UK economy grew by 0.5% in the 4th quarter. This means that at the end of 2015, GDP grew by 2.2%," - said Chris Williamson, economist at Markit.

The Canadian dollar has fallen more than 100 pips against the US dollar, reaching the psychological mark CAD1.4100 and updating the 12-year minimum. The main reason for such dynamics was a significant decline in oil prices because of concerns about oversupply of raw materials. Yesterday, the American Petroleum Institute issued its report, which showed a reduction in oil reserves by 5.6 million barrels from December 26 to January 1. According to the report, gasoline inventories rose by 7.1 million barrels, while distillate stocks - by 5.6 million barrels per day. US Energy Information Administration on Wednesday reported on the fall of commercial oil stocks in the United States to 5.09 million barrels last week, while analysts had expected an increase of 300,000 barrels. However, at the same time it became aware of the strong increase in stocks of gasoline and distillates. Oil reserves in Cushing terminal reached a new record high.

Statistics Canada stated: In November, exports rose slightly have contributed to a reduction in the trade deficit to 1.99 billion. Canadian dollars against 2.49 billion. Canadian dollars in October (revised from 2.76 billion.). Analysts had forecast a deficit of 2.60 billion. Canadian dollars. It is worth emphasizing the deficit in trade in goods is fixed for the 15th consecutive month, reflecting the continuing economic difficulties of the low oil prices and a weak Canadian dollar.

Stock indices traded lower on geopolitical tensions and on concerns over the slowdown in the Chinese economy. The Caixin/Markit Services Purchasing Managers' Index (PMI) for China declined to 50.2 in December from 51.2 in November, missing expectations for an increase to 52.3.

North Korea announced on Wednesday morning that it successfully tested hydrogen nuclear bomb. The announcement followed detection of a 5.1 magnitude earthquake. It would be the fourth nuclear test since 2006.

Meanwhile, the economic data from Eurozone was mixed. Markit Economics released final services purchasing managers' index (PMI) for the Eurozone on Wednesday. Eurozone's final services purchasing managers' index (PMI) remained unchanged at 54.2 in December, up from the preliminary reading of 53.9.

The index was driven by a rise in business activity in Germany, Italy, Spain and Ireland.

Eurozone's final composite output index rose to 54.3 in December from 54.2 in November, up from the preliminary reading of 54.0.

"The Eurozone economy starts 2016 on a solid footing and well placed to enjoy a year of robust expansion. Growth of business activity continued to edge higher at the end of 2015, with an upturn in the PMI rounding off the strongest quarter for four and-a-half years," Chief Economist at Markit Chris Williamson said.

He added that the Eurozone's economy grew at 0.4% in the fourth quarter and 1.5% in 2015.

Germany's final services purchasing managers' index (PMI) rose to 56.0 in December from 55.6 in November, up from the preliminary reading of 55.4. It was the highest level since July 2014.

France's final services purchasing managers' index (PMI) dropped to 49.8 in December from 51.0 in November, down from the preliminary reading of 50.0.

Eurostat released its producer price index for the Eurozone on Wednesday. Eurozone's producer price index declined 0.2% in November, in line with expectations, after a 0.3% decrease in October.

On a yearly basis, Eurozone's producer price index dropped 3.2% in November, missing expectations for a 3.1% decrease, after a 3.2% fall in October. October's figure was revised down from a 3.1% drop.

Eurozone's producer prices excluding energy fell 0.7% year-on-year in November.

Markit's and the Chartered Institute of Purchasing & Supply's services purchasing managers' index (PMI) for the U.K. declined to 55.5 in December from 55.9 in November, missing expectations for a fall to 55.6.

A reading above 50 indicates expansion in the sector.

The decline was driven by a slower growth in new business and job creation.

"The services sector remained the key driver of the UK's economic upturn in December, helping to offset the recent weakness seen in manufacturing and putting the economy on the starting block for another year of 2-2.5% growth in 2016," the Chief Economist at Markit Chris Williamson said.

He added that the U.K. economy expanded 0.5% in the fourth quarter of 2015.

Indexes on the close:

Name Price Change Change %

FTSE 100 6,073.38 -63.86 -1.04 %

DAX 10,214.02 -96.08 -0.93 %

CAC 40 4,480.47 -57.16 -1.26 %

Oil prices declined on the U.S. crude oil inventories data as U.S. gasoline inventories and crude stocks at the Cushing rose last week. The U.S. Energy Information Administration (EIA) released its crude oil inventories data on Wednesday. U.S. crude inventories slid by 5.1 million barrels to 482.3 million in the week to January 01.

Analysts had expected U.S. crude oil inventories to decline by 1.5 million barrels.

Gasoline inventories increased by 10.6 million barrels, according to the EIA.

Crude stocks at the Cushing, Oklahoma, climbed by 917,000 barrels.

U.S. crude oil imports decreased by 382,000 barrels per day.

Refineries in the U.S. were running at 92.5% of capacity, down from 92.6% the previous week.

The weak Chinese services data also weighed on oil prices. The Caixin/Markit Services Purchasing Managers' Index (PMI) for China declined to 50.2 in December from 51.2 in November, missing expectations for an increase to 52.3. The index was driven by a subdued client demand.

WTI crude oil for February delivery declined to $34.17 a barrel on the New York Mercantile Exchange.

Brent crude oil for February fell to $34.63 a barrel on ICE Futures Europe.

Gold price rose due to increasing demand for safe-haven assets. News that North Korea successfully tested hydrogen nuclear bomb supported gold price.

Market participants continued to eye the situation in the Middle East.

Concerns over slowdown in the Chinese economy also supported gold price. The Caixin/Markit Services Purchasing Managers' Index (PMI) for China declined to 50.2 in December from 51.2 in November, missing expectations for an increase to 52.3. The index was driven by a subdued client demand.

February futures for gold on the COMEX today rose to 1092.60 dollars per ounce.

Major U.S. stock-indexes fell more than percent in early trading on Wednesday as investors looked for safe havens after China allowed its currency to weaken further and oil prices fell to their lowest in more than 11 years. Investors were also nervous about rising geopolitical tensions after North Korea said it had successfully tested a hydrogen bomb and Saudi Arabia cut ties with Iran. The People's Bank of China on Wednesday set the yuan's official midpoint rate at its weakest level in 4,5 years, while a PMI survey showed services sector activity expanded at its slowest rate in 17 months in December in the country.

Almost all Dow stocks in negative area (28 of 30). Top looser - Chevron Corporation (CVX, -3,88%). Top gainer - Wal-Mart Stores Inc. (WMT, +0.87%).

All S&P sectors also in negative area. Top looser - Basic Materials (-3,2%).

At the moment:

Dow 16870.00 -211.00 -1.24%

S&P 500 1988.75 -23.00 -1.14%

Nasdaq 100 4448.75 -35.00 -0.78%

Oil 34.42 -1.55 -4.31%

Gold 1087.70 +9.30 +0.86%

U.S. 10yr 2.20 -0.05

The Australian Industry Group (AiG) released its services purchasing managers' index (PMI) for Australia on the late Tuesday evening. The index slid to 46.3 in December from 48.2 in October. It was the lowest level since November 2014.

A reading above 50 indicates expansion in the sector, while a reading below 50 indicates contraction in the sector.

Four of the five activity sub-indexes were below 50 points in December.

Main contributor to the drop was the sales sub-index, which slid by 6.3 points in December.

The U.S. Energy Information Administration (EIA) released its crude oil inventories data on Wednesday. U.S. crude inventories slid by 5.1 million barrels to 482.3 million in the week to January 01.

Analysts had expected U.S. crude oil inventories to decline by 1.5 million barrels.

Gasoline inventories increased by 10.6 million barrels, according to the EIA.

Crude stocks at the Cushing, Oklahoma, climbed by 917,000 barrels.

U.S. crude oil imports decreased by 382,000 barrels per day.

Refineries in the U.S. were running at 92.5% of capacity, down from 92.6% the previous week.

The U.S. Commerce Department released factory orders data on Wednesday. Factory orders in the U.S. declined 0.2% in November, in line with expectations, after a 1.3% rise in October. October's figure was revised down from a 1.5% increase.

Durable goods orders were flat in November, while orders for nondurable goods declined 0.4%.

Factory orders excluding transportation declined 0.3% in November, after a 0.1% rise in October.

The Institute for Supply Management released its non-manufacturing purchasing managers' index for the U.S. on Wednesday. The index fell to 55.3 in December from 55.9 in November, missing expectations for an increase to 56.0.

A reading above 50 indicates a growth in the service sector.

The ISM's new orders index jumped to 58.2 in December from 57.5 in November.

The business activity/production index rose to 58.7 in December from 58.2 in November.

The ISM's employment index was up to 55.7 in December from 55.0 in November.

The prices index declined to 49.7 in December from 50.3 in November.

Markit Economics released final services purchasing managers' index (PMI) for the U.S. on Wednesday. Final U.S. services purchasing managers' index (PMI) fell to 54.3 in December from 56.1 in November, up from the preliminary reading of 53.7. It was the lowest level since January 2015

The index was driven by weaker confidence among clients.

"While the survey data indicate that the economy grew at a reasonably healthy 1.9% annualised clip in the fourth quarter, the weakness seen in the final month of the year raises concerns that growth is losing momentum, possibly quite markedly," Chief Economist at Markit Chris Williamson said.

According to the British Retail Consortium (BRC), the U.K. shop prices declined by 2.0% year-on-year in December, after a 2.1% decline in November.

The decline was mainly driven by a drop in non-food prices, which plunged 3.0% year-on-year in December.

Food prices remained unchanged at an annual rate of 0.3% in December.

"With retailers continuing to invest in price, relatively low commodity prices and intense competition a hallmark of the industry, we can expect falling prices to continue in the medium term," BRC Chief Executive, Helen Dickinson, said.

U.S. stock-index futures declined.

Global Stocks:

Nikkei 18,191.32 -182.68 -0.99%

Hang Seng 20,980.81 -207.91 -0.98%

Shanghai Composite 3,362.29 +74.58 +2.27%

FTSE 6,029.94 -107.30 -1.75%

CAC 4,449.88 -87.75 -1.93%

DAX 10,126.92 -183.18 -1.78%

Crude oil $34.76 (-3.36%)

Gold $10038.80 (+0.50%)

(company / ticker / price / change, % / volume)

The U.S. Commerce Department released the trade data on Wednesday. The U.S. trade deficit narrowed to $42.37 billion in November from a deficit of $44.58 billion in October. October's figure was revised down from a deficit of $43.89 billion.

Analysts had expected a trade deficit of $44.0 billion.

The decline of a deficit was driven by a drop in imports. Exports fell by 0.9% in November, while imports decreased by 1.7%.

A stronger U.S. dollar weighed on exports.

USDJPY 119.00 (USD 669m) 119.50 (711m) 120.00 (308m) 120.25 (401m)

EURUSD 1.0750 (EUR 350m) 1.0800 (EUR 740m) 1.0905 (676m) 1.0925 (854m)

AUDUSD 0.7275 (AUD 991m)

NZDUSD 0.6380 (NZD 711m) 0.6700 (250m)

Upgrades:

Downgrades:

United Technologies Incorporated (UTX) downgraded to Neutral from Buy at Sterne Agee CRT

Other:

Procter & Gamble (PG) initiated with a Neutral at Atlantic Equities

Statistics Canada released the trade data on Wednesday. Canada's trade deficit narrowed to C$1.99 billion in November from a deficit of C$2.49 billion in October. October's figure was revised up from a deficit of C$2.76 billion.

Analysts had expected a trade deficit of C$2.6 billion.

The fall in deficit was driven by a rise in exports and a drop in imports. Exports rose 0.4% in November, while imports fell 0.7%.

Exports of motor vehicles and parts increased by 5.9% in November, exports of energy products fell by 6.6%, while exports of metal and non-metallic mineral products climbed 20.4%.

Imports of consumer products declined by 1.0% in November, and imports of electronic and electrical equipment and parts dropped 2.9%, while imports of energy products slid 6.4%.

Private sector in the U.S. added 257,000 jobs in December, according the ADP report on Wednesday. November's figure was revised down to 211,000 jobs from a previous reading of 217,000 jobs.

Analysts expected the private sector to add 192,000 jobs.

Services sector added 234,000 jobs in December, while goods-producing sector added 23,000.

"Strong job growth shows no signs of abating. The only industry shedding jobs is energy. If this pace of job growth is sustained, which seems likely, the economy will be back to full employment by mid-year," the Chief Economist of Moody's Analytics Mark Zandi said.

Official labour market data will be released on Friday. Analysts expect that U.S. unemployment rate is expected to remain unchanged at 5.0% in December. The U.S. economy is expected to add 200,000 jobs in December, after adding 211,000 jobs in November.

The final Markit/Nikkei services Purchasing Managers' Index (PMI) for Japan fell to 51.5 in December from 51.6 in November.

A reading above 50 indicates expansion in the sector, a reading below 50 indicates contraction of activity.

The index was driven by a rise in new orders.

"New business growth in the service sector accelerated to a four-month high in December, supporting a further increase in both output and employment," economist at Markit, Amy Brownbill, said.

Economic calendar (GMT0):

(Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual)

01:45 China Markit/Caixin Services PMI December 51.2 52.3 50.2

07:45 France Consumer confidence December 96 95 96

08:50 France Services PMI (Finally) December 51 50 49.8

08:55 Germany Services PMI (Finally) December 55.6 55.4 56

09:00 Eurozone Services PMI (Finally) December 54.2 53.9 54.2

09:30 United Kingdom Purchasing Manager Index Services December 55.9 55.6 55.5

10:00 Eurozone Producer Price Index, MoM November -0.3% -0.2% -0.2%

10:00 Eurozone Producer Price Index (YoY) November -3.2% Revised From -3.1% -3.1% -3.2%

12:00 U.S. MBA Mortgage Applications December 7.3% -11.6%

The U.S. dollar traded mixed against the most major currencies ahead of the release of the U.S. economic data today. According to the ADP employment report, the U.S. economy is expected to add 192,000 jobs in December.

The ISM non-manufacturing purchasing managers' index is expected to rise to 56.0 in December from 55.9 in November.

The U.S. factory orders are expected to decline 0.2% in November, after a 1.5% rise in October.

The Fed will release its latest monetary policy minutes at 19:00 GMT.

The euro traded higher against the U.S. dollar after the release of the mixed economic data from the Eurozone. Markit Economics released final services purchasing managers' index (PMI) for the Eurozone on Wednesday. Eurozone's final services purchasing managers' index (PMI) remained unchanged at 54.2 in December, up from the preliminary reading of 53.9.

The index was driven by a rise in business activity in Germany, Italy, Spain and Ireland.

Eurozone's final composite output index rose to 54.3 in December from 54.2 in November, up from the preliminary reading of 54.0.

"The Eurozone economy starts 2016 on a solid footing and well placed to enjoy a year of robust expansion. Growth of business activity continued to edge higher at the end of 2015, with an upturn in the PMI rounding off the strongest quarter for four and-a-half years," Chief Economist at Markit Chris Williamson said.

He added that the Eurozone's economy grew at 0.4% in the fourth quarter and 1.5% in 2015.

Germany's final services purchasing managers' index (PMI) rose to 56.0 in December from 55.6 in November, up from the preliminary reading of 55.4. It was the highest level since July 2014.

France's final services purchasing managers' index (PMI) dropped to 49.8 in December from 51.0 in November, down from the preliminary reading of 50.0.

Eurostat released its producer price index for the Eurozone on Wednesday. Eurozone's producer price index declined 0.2% in November, in line with expectations, after a 0.3% decrease in October.

On a yearly basis, Eurozone's producer price index dropped 3.2% in November, missing expectations for a 3.1% decrease, after a 3.2% fall in October. October's figure was revised down from a 3.1% drop.

Eurozone's producer prices excluding energy fell 0.7% year-on-year in November.

The British pound traded mixed against the U.S. dollar despite the weaker-than-expected services PMI data from the U.K. Markit's and the Chartered Institute of Purchasing & Supply's services purchasing managers' index (PMI) for the U.K. declined to 55.5 in December from 55.9 in November, missing expectations for a fall to 55.6.

A reading above 50 indicates expansion in the sector.

The decline was driven by a slower growth in new business and job creation.

"The services sector remained the key driver of the UK's economic upturn in December, helping to offset the recent weakness seen in manufacturing and putting the economy on the starting block for another year of 2-2.5% growth in 2016," the Chief Economist at Markit Chris Williamson said.

He added that the U.K. economy expanded 0.5% in the fourth quarter of 2015.

EUR/USD: the currency pair rose to $1.0759

GBP/USD: the currency pair traded mixed

USD/JPY: the currency pair decreased to Y118.24

The most important news that are expected (GMT0):

13:15 U.S. ADP Employment Report December 217 192

13:30 Canada Trade balance, billions November -2.76 -2.6

13:30 U.S. International Trade, bln November -43.89 -44

14:45 U.S. Services PMI (Finally) December 56.1 55.1

15:00 U.S. ISM Non-Manufacturing December 55.9 56

15:00 U.S. Factory Orders November 1.5% -0.2%

15:30 U.S. Crude Oil Inventories January 2.629 -1.5

19:00 U.S. FOMC meeting minutes

EUR/USD

Offers 1.0750 1.0770 1.0785 1.0800 1.0825 1.0840 1.0865 1.0880 1.0900

BIds 1.0720 1.0700 1.0680 1.0665 1.0650 1.0630 1.0600 1.0585 1.0565 1.0550

GBP/USD

Offers 1.4665 1.4685 1.4700 1.4725-30 1.4750 1.4765 1.4780 1.4800

BIds 1.4630 1.4600 1.4580 1.4565 1.4550 1.4530 1.4500

EUR/GBP

Offers 0.7350 0.7370 0.7385 0.740 0.7420 0.7435 0.7450

BIds 0.7320 0.7300 0.7275-80 0.7250 0.7230 0.7200

EUR/JPY

Offers 127.30 127.50 127.75 128.00 128.20 128.50 128.75 129.00

BIds 127.00 126.80 126.50 126.30 126.00 125.85 125.50

USD/JPY

Offers 118.80-85 119.00 119.30 119.60 119.80 120.00 120.20-25 120.50

BIds 118.35-40 118.20 118.00 117.80-85 117.50 117.25-30 117.00

AUD/USD

Offers 0.7100 0.7120-25 0.7150 0.7165 0.7185 0.7200 0.7220-25 0.7250

BIds 0.7075-80 0.7050 0.7030 0.7000 0.6985 0.6950

Stock indices traded lower on concerns over the slowdown in the Chinese economy. The Caixin/Markit Services Purchasing Managers' Index (PMI) for China declined to 50.2 in December from 51.2 in November, missing expectations for an increase to 52.3.

News that North Korea successfully tested hydrogen nuclear bomb also weighed on stock markets.

Meanwhile, the economic data from Eurozone was mixed. Markit Economics released final services purchasing managers' index (PMI) for the Eurozone on Wednesday. Eurozone's final services purchasing managers' index (PMI) remained unchanged at 54.2 in December, up from the preliminary reading of 53.9.

The index was driven by a rise in business activity in Germany, Italy, Spain and Ireland.

Eurozone's final composite output index rose to 54.3 in December from 54.2 in November, up from the preliminary reading of 54.0.

"The Eurozone economy starts 2016 on a solid footing and well placed to enjoy a year of robust expansion. Growth of business activity continued to edge higher at the end of 2015, with an upturn in the PMI rounding off the strongest quarter for four and-a-half years," Chief Economist at Markit Chris Williamson said.

He added that the Eurozone's economy grew at 0.4% in the fourth quarter and 1.5% in 2015.

Germany's final services purchasing managers' index (PMI) rose to 56.0 in December from 55.6 in November, up from the preliminary reading of 55.4. It was the highest level since July 2014.

France's final services purchasing managers' index (PMI) dropped to 49.8 in December from 51.0 in November, down from the preliminary reading of 50.0.

Eurostat released its producer price index for the Eurozone on Wednesday. Eurozone's producer price index declined 0.2% in November, in line with expectations, after a 0.3% decrease in October.

On a yearly basis, Eurozone's producer price index dropped 3.2% in November, missing expectations for a 3.1% decrease, after a 3.2% fall in October. October's figure was revised down from a 3.1% drop.

Eurozone's producer prices excluding energy fell 0.7% year-on-year in November.

Markit's and the Chartered Institute of Purchasing & Supply's services purchasing managers' index (PMI) for the U.K. declined to 55.5 in December from 55.9 in November, missing expectations for a fall to 55.6.

A reading above 50 indicates expansion in the sector.

The decline was driven by a slower growth in new business and job creation.

"The services sector remained the key driver of the UK's economic upturn in December, helping to offset the recent weakness seen in manufacturing and putting the economy on the starting block for another year of 2-2.5% growth in 2016," the Chief Economist at Markit Chris Williamson said.

He added that the U.K. economy expanded 0.5% in the fourth quarter of 2015.

Current figures:

Name Price Change Change %

FTSE 100 6,057.1 -80.14 -1.31 %

DAX 10,170.77 -139.33 -1.35 %

CAC 40 4,472.62 -65.01 -1.43 %

Markit Economics released final services purchasing managers' index (PMI) for Spain on Wednesday. Spain's final services purchasing managers' index (PMI) fell to 55.1 in December from 56.7 in November.

The index was driven by a slower growth in new business.

"The Spanish service sector ended 2015 with a sense of optimism, according to the latest PMI survey. The data, collected prior to the general election on December 20th, signalled a further sharp rise in business activity, and improved optimism that growth will be maintained during 2016," Senior Economist at Markit Andrew Harker said.

Markit/ADACI's services purchasing managers' index (PMI) for Italy climbed to 55.3 in December from 53.4 in November.

A reading above 50 indicates expansion in the sector.

The index was driven by a rise in total activity, new business and job creation.

"With data showing further solid gains in new business and the pace of job creation strengthening, businesses head into 2016 in much finer fettle than that which they began 2015," an economist at Markit Phil Smith said.

Markit Economics released final services purchasing managers' index (PMI) for France on Wednesday. France's final services purchasing managers' index (PMI) dropped to 49.8 in December from 51.0 in November, down from the preliminary reading of 50.0.

The index was driven by a slowdown in new business growth and in backlogs of work.

"The French service sector broadly stagnated in December, ending a ten-month run of expanding activity. Anecdotal evidence suggested that a number of businesses continued to be affected by cancellations following the recent terrorist attacks, exerting a drag on new business growth," Senior Economist at Markit Jack Kennedy said.

French statistical office INSEE released its consumer confidence index for France on Wednesday. French consumer confidence index remained unchanged at 96 in December, beating expectations for a decline to 95.

The index of the outlook on consumers' saving capacity remained unchanged at -4 in December.

The index of households' assessment of their financial situation in the past twelve months fell to -25 in December from -24 in November.

The index of the outlook on consumers' financial situation for next twelve months increased to -7 in December from-10 in November.

The index of the outlook on unemployment rising in coming months rose to 46 in December from 35 in November.

The index for future inflation expectations was up to -38 in December from -41 in November.

Markit Economics released final services purchasing managers' index (PMI) for Germany on Wednesday. Germany's final services purchasing managers' index (PMI) rose to 56.0 in December from 55.6 in November, up from the preliminary reading of 55.4. It was the highest level since July 2014.

The index was driven by a rise in new business.

"The upturn in Germany's service sector continued at the year-end with activity increasing at the strongest rate in nearly one-and-a-half years. Moreover, the combination of strongly rising new business levels and a further accumulation of work outstanding suggests that companies will remain in expansion mode as we move into 2016," an economist at Markit, Oliver Kolodseike, said.

USD/JPY 119.00 (USD 669m) 119.50 (711m) 120.00 (308m) 120.25 (401m)

EUR/USD 1.0750 (EUR 350m) 1.0800 (EUR 740m) 1.0905 (676m) 1.0925 (854m)

AUD/USD 0.7275 (AUD 991m)

NZD/USD 0.6380 (NZD 711m) 0.6700 (250m)

Eurostat released its producer price index for the Eurozone on Wednesday. Eurozone's producer price index declined 0.2% in November, in line with expectations, after a 0.3% decrease in October.

Intermediate goods prices fell 0.3% in November, capital goods prices were flat, non-durable consumer goods prices declined 0.2%, and durable consumer goods prices were stable, while energy prices decreased 0.3%.

On a yearly basis, Eurozone's producer price index dropped 3.2% in November, missing expectations for a 3.1% decrease, after a 3.2% fall in October. October's figure was revised down from a 3.1% drop.

Eurozone's producer prices excluding energy fell 0.7% year-on-year in November. Energy prices dropped at an annual rate of 9.4%.

Markit Economics released final services purchasing managers' index (PMI) for the Eurozone on Wednesday. Eurozone's final services purchasing managers' index (PMI) remained unchanged at 54.2 in December, up from the preliminary reading of 53.9.

The index was driven by a rise in business activity in Germany, Italy, Spain and Ireland.

Eurozone's final composite output index rose to 54.3 in December from 54.2 in November, up from the preliminary reading of 54.0.

"The Eurozone economy starts 2016 on a solid footing and well placed to enjoy a year of robust expansion. Growth of business activity continued to edge higher at the end of 2015, with an upturn in the PMI rounding off the strongest quarter for four and-a-half years," Chief Economist at Markit Chris Williamson said.

He added that the Eurozone's economy grew at 0.4% in the fourth quarter and 1.5% in 2015.

Markit's and the Chartered Institute of Purchasing & Supply's services purchasing managers' index (PMI) for the U.K. declined to 55.5 in December from 55.9 in November, missing expectations for a fall to 55.6.

A reading above 50 indicates expansion in the sector.

The decline was driven by a slower growth in new business and job creation.

"The services sector remained the key driver of the UK's economic upturn in December, helping to offset the recent weakness seen in manufacturing and putting the economy on the starting block for another year of 2-2.5% growth in 2016," the Chief Economist at Markit Chris Williamson said.

He added that the U.K. economy expanded 0.5% in the fourth quarter of 2015.

North Korea announced on Wednesday morning that it successfully tested hydrogen nuclear bomb. The announcement followed detection of a 5.1 magnitude earthquake. It would be the fourth nuclear test since 2006.

The governments of Japan and South Korea have expressed concerns about the North Korean test, calling it a threat to its security.

North Korea's actions will be discussed at an emergency meeting of the UN today.

The European Central Bank (ECB) Executive Board member Peter Praet said in an interview with Belgian weekly magazine Knack that the central bank will continue its quantitative easing until the 2% inflation target will be reached.

"If we look at the economic situation, I think that the current policy will certainly be in place until March 2017 and longer if necessary," he said.

Saudi Arabia on Tuesday lowered the prices it charges for crude oil in Europe. Saudi Arabian Oil Co., the country's state-owned oil company, said that it cut its light crude by $0.60 a barrel to Northwest Europe and by $0.20 a barrel in the Mediterranean for February delivery.

This action could add to the escalation of the situation in the Middle East as Iran plans to raise its oil exports once the sanctions are lift off.

The Caixin/Markit Services Purchasing Managers' Index (PMI) for China declined to 50.2 in December from 51.2 in November, missing expectations for an increase to 52.3.

The index was driven by a subdued client demand.

Recruitment at services continued to rise in December, while backlogs of work were little-changed.

"In light of the setback to services sector growth, the government needs to gradually relax restrictions in the sector. This will release the potential of supply-side reform, improve the economic structure and help with the industrial transformation and upgrading," Dr. He Fan, Chief Economist at Caixin Insight Group, said.

EUR / USD

Resistance levels (open interest**, contracts)

$1.0840 (2813)

$1.0813 (1535)

$1.0772 (1184)

Price at time of writing this review: $1.0732

Support levels (open interest**, contracts):

$1.0700 (2761)

$1.0670 (4892)

$1.0633 (3355)

Comments:

- Overall open interest on the CALL options with the expiration date January, 8 is 55654 contracts, with the maximum number of contracts with strike price $1,1100 (7169);

- Overall open interest on the PUT options with the expiration date January, 8 is 73813 contracts, with the maximum number of contracts with strike price $1,0450 (8033);

- The ratio of PUT/CALL was 1.33 versus 1.33 from the previous trading day according to data from January, 5

GBP/USD

Resistance levels (open interest**, contracts)

$1.4901 (477)

$1.4801 (533)

$1.4704 (198)

Price at time of writing this review: $1.4649

Support levels (open interest**, contracts):

$1.4597 (827)

$1.4499 (208)

$1.4400 (132)

Comments:

- Overall open interest on the CALL options with the expiration date January, 8 is 21147 contracts, with the maximum number of contracts with strike price $1,5100 (2007);

- Overall open interest on the PUT options with the expiration date January, 8 is 19196 contracts, with the maximum number of contracts with strike price $1,5100 (3084);

- The ratio of PUT/CALL was 0.91 versus 0.92 from the previous trading day according to data from January, 5

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

Economic calendar (GMT0):

Time/ Region/ Event/ Period/ Previous/ Forecast/ Actual

01:45 China Markit/Caixin Services PMI December 51.2 52.3 50.2

The yen rose against the U.S. dollar to the highest level since October 15 as risk sentiment declined after Chinese authorities set the exchange rate of the yuan lower today. The People's Bank of China has lowered the rate to 6.5314 yuan per dollar from 6.5169 yuan per dollar yesterday.

New Zealand and Australian dollars declined after data showed that Markit/Caixin Services PMI for China declined to 50.2 points in December from 51.2 reported previously. Economists had expected a reading of 52.3. This means that activity growth has slowed down. Recently a corresponding index for manufacturers declined. Investors are concerned over China's ability to meet its growth target this year.

The Australian dollar was also weighed by domestic data. The AIG Services Index fell to 46.3 points in December (the weakest result since November 2014) from 48.2 reported previously.

EUR/USD: the pair declined to $1.0733 in Asian trade

USD/JPY: the pair fell to Y118.71

GBP/USD: the pair fell to $1.4648

The most important news that are expected (GMT0):

(time / country / index / period / previous value / forecast)

07:45 France Consumer confidence December 96 95

08:50 France Services PMI (Finally) 51 50

08:55 Germany Services PMI (Finally) December 55.6 55.4

09:00 Eurozone Services PMI (Finally) 54.2 53.9

09:30 United Kingdom Purchasing Manager Index Services December 55.9 55.6

10:00 Eurozone Producer Price Index, MoM November -0.3% -0.2%

10:00 Eurozone Producer Price Index (YoY) November -3.1% -3.1%

12:00 U.S. MBA Mortgage Applications December

13:15 U.S. ADP Employment Report December 217 192

13:30 Canada Trade balance, billions November -2.76 -2.6

13:30 U.S. International Trade, bln November -43.89 -44

14:45 U.S. Services PMI (Finally) December 56.1 55.1

15:00 U.S. ISM Non-Manufacturing January 55.9 56

15:00 U.S. Factory Orders November 1.5% -0.2%

15:30 U.S. Crude Oil Inventories January 2.629 -1.5

19:00 U.S. FOMC meeting minutes

West Texas Intermediate futures for February delivery is currently at $36.08 (+0.31%), while Brent crude is at $36.50 (+0.22%) staying not far from eleven-year lows. Investors are concerned over the persistent supply glut and rising stockpiles. In fact, some analysts believe that the conflict between major oil producers Saudi Arabia and Iran will only intensify the oversupply issue as now these two countries are even less likely to co-operate in order to support oil prices. Meanwhile Iran is preparing to raise supplies this year.

Market participants are waiting for the Energy Information Administration to report on U.S. crude oil stockpiles later today.

Gold steadied at $1,079.00 (+0.06%) amid demand for safe-haven assets supported by tensions in the Middle East and the Korean peninsula.

North Korea said it had successfully tested a miniaturised hydrogen nuclear device on Wednesday morning. Japan called this event a threat to Japan's security.

Investors traditionally turn to gold at times of crisis and geopolitical tensions, but such gains are normally short-lived. Analysts noted that this time the precious metal hasn't gained much.

The dollar, bullion's traditional opponent, is likely to be strong on higher rates, which are expected to grow further this year.

U.S. stock indices traded mixed and closed not far from open levels as investors continued to overcome Monday selloff shock.

The Dow Jones Industrial Average added 9.72 points, or less than 0.1%, to 17,158.66. The S&P 500 climbed 4.04 points, or 0.2%, to 2,016.70. The Nasdaq Composite declined 11.66 points, or 0.2%, to 4,891.43.

Business activity rose in New York in December despite expectations of a moderate worsening. The corresponding index from the Institute for Supply Management rose to 62.0 points in December from 60.7 in the previous month. Economists had expected the index to decline to 60.0. Despite a slight decline the index remained above the 50 points threshold suggesting expansion.

This morning in Asia Hong Kong Hang Seng fell 0.64%, or 135.35, to 21,053.37. China Shanghai Composite Index gained 1.39%, or 45.63, to 3,333.34. The Nikkei fell 1.04%, or 191.98, to 18,182.02.

Asian stock indices traded mixed. Japanese stocks climbed at the beginning of the session taking a lead from Wall Street, but declined later amid a stronger yen, which is unfavorable for exporters. The yen rose against the U.S. dollar to the highest level since October 15 as risk sentiment declined after Chinese authorities set the exchange rate of the yuan lower.

(raw materials / closing price /% change)

Oil 36.27 +0.83%

Gold 1,077.10 -0.12%

(index / closing price / change items /% change)

Nikkei 225 18,374 -76.98 -0.42 %

Hang Seng 21,188.72 -138.40 -0.65 %

Shanghai Composite 3,287.71 -8.55 -0.26 %

FTSE 100 6,137.24 +43.81 +0.72 %

CAC 40 4,537.63 +15.18 +0.34 %

Xetra DAX 10,310.1 +26.66 +0.26 %

S&P 500 2,016.71 +4.05 +0.20 %

NASDAQ Composite 4,891.43 -11.66 -0.24 %

Dow Jones 17,158.66 +9.72 +0.06 %

(pare/closed(GMT +2)/change, %)

EUR/USD $1,0747 -0,77%

GBP/USD $1,4673 -0,27%

USD/CHF Chf1,0084 +0,63%

USD/JPY Y119,04 -0,33%

EUR/JPY Y127,96 -1,09%

GBP/JPY Y174,69 -0,60%

AUD/USD $0,7159 -0,41%

NZD/USD $0,6703 -0,70%

USD/CAD C$1,3994 +0,30%

(time / country / index / period / previous value / forecast)

01:45 China Markit/Caixin Services PMI December 51.2

07:45 France Consumer confidence December 96 95

08:50 France Services PMI (Finally) 51 50

08:55 Germany Services PMI (Finally) December 55.6 55.4

09:00 Eurozone Services PMI (Finally) 54.2 53.9

09:30 United Kingdom Purchasing Manager Index Services December 55.9 55.6

10:00 Eurozone Producer Price Index, MoM November -0.3% -0.2%

10:00 Eurozone Producer Price Index (YoY) November -3.1% -3.1%

12:00 U.S. MBA Mortgage Applications December 7.3%

13:15 U.S. ADP Employment Report December 217 190

13:30 Canada Trade balance, billions November -2.76 -2.6

13:30 U.S. International Trade, bln November -43.89 -44

14:45 U.S. Services PMI (Finally) December 56.1 53.7

15:00 U.S. ISM Non-Manufacturing January 55.9 56

15:00 U.S. Factory Orders November 1.5% -0.2%

15:30 U.S. Crude Oil Inventories January 2.629

19:00 U.S. FOMC meeting minutes