Investors are positioning themselves for diverging rate moves, with the US Federal Reserve Bank overnight saying pressures on the US economy are easing, suggesting a rate rise in the world's largest economy sooner rather than later.

The Australian dollar was down 0.3 per cent, paring earlier losses as the greenback waned. Gold rallied.

What you need2know

SPI futures up 11 pts at 5511 at 7.35 am Sydney time

AUD -0.3% to 74.78 US cents

On Wall St, Dow flat, S&P 500 -0.1%, Nasdaq +0.6%

In New York, Apple +6.5%, Coca-Cola -3.3%, BHP +1%, Rio +1.3%,

In Europe, Stoxx 50 +0.7%, FTSE +0.4%, CAC +1.2%, DAX +0.7%

Spot gold +1% to $US1333.19 an ounce

Brent crude -2.9% to $US43.58 a barrel

Iron ore + 0.9% to $US58.63 a tonne

What's on today

Local data: Australia trade price indices 2nd quarter

Macquarie Group annual general meeting

Overseas data:  US jobless claims (weekly), US Bloomberg consumer comfort (weekly), US advanced goods trade balance (June), Germany unemployment (July), Germany inflation (July), Euro-area economic confidence, business climate (July).

Stocks in focus

Oil producers Oil Search (OSH), Santos (STO) and Woodside Petroleum (WPL) as oil prices are heading back towards the $US40 mark, with brent crude slipping more than 3 per cent overnight.

Energy Resources (ERA) is slated to release half-year results on Thursday, as is Henderson Group (HGG). GUD Holdings (GUD) briefs on its full-year results. Macquarie Group (MGQ) holds as its annual general meeting. Rio Tinto (RIO) staff are bracing for another round of restructuring.

Currencies

The yen fell by the most in almost two weeks after Japanese Prime Minister Shinzo Abe surprised markets with a fiscal-stimulus package exceeding ¥28 trillion ($354 billion) as he seeks to jump-start the country's floundering economy.

The yen weakened 1 per cent to 105.71 per dollar, after advancing 1.4 per cent in the previous two days.

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, was higher before the Fed decision. It weakened a bit after a government report showed durable-goods orders fell more than expected in June while orders for business equipment rose for the first time in three months.

Commodities

Goldman Sachs increased its short-term outlook for iron ore and predicted continued high levels of volatility in steel markets. Iron ore will trade at $US50 a tonne in three months and $US40 in six months, analysts including Christian Lelong and Amber Cai said in a report dated July 27. That's up from $US45 and $US35 previously. Ore with 62 per cent content at Qingdao in China gained 0.9 per cent to $US58.63 on Wednesday, according to Metal Bulletin.

Commodities will probably rebound next year as demand strengthens, according to the World Bank, adding its voice to those including Citigroup who've forecast that 2017 may be a better year for raw-material prices. The Washington-based lender pared its forecast for declines in 2016 in its latest quarterly outlook, and forecast a modest rebound next year. "We are at the bottom of the cycle," senior economist John Baffes, the report's primary author, said in a phone interview.

Oil dropped to a three-month low in New York after government data showed that US crude stockpiles unexpectedly climbed last week, halting the longest streak of declines on record. West Texas Intermediate oil for September delivery dropped 2.4 per cent to $US41.91 a barrel in New York. Prices touched $US41.93 earlier, the lowest since April 20.

United States

The Federal Reserve left interest rates unchanged on Wednesday but said near-term risks to the US economic outlook had diminished, opening the door to a resumption of monetary policy tightening this year. The US central bank said the economy had expanded at a moderate rate and job gains were strong in June. It added that household spending also had been "growing strongly", and pointed to an increase in labour utilisation.

US stocks spent most of the session mixed, with earnings reports setting the tone. Apple rallied 6.5 per cent after saying iPhone demand picked up and forecasting fourth-quarter sales that may exceed analysts' estimates.

Twitter tumbled after giving a third-quarter revenue forecast that trailed projections. Coca-Cola dropped on second-quarter sales that trailed analysts' estimates. McDonald's headed for its biggest two-day slide since August.

After the closing bell, Facebook reported second-quarter revenue that beat analysts' projections, lifted by sales of video and Instagram ads. Second-quarter sales climbed 59 per cent to $US6.44 billion, compared with the $US6.01 billion average estimate of analysts surveyed by Bloomberg. Profit, excluding some items, was 97 cents a share, the California-based company said Wednesday in a statement. Analysts had predicted 82 cents on average.

Europe

European stocks broke out of their torpor after ending little changed for four straight days.

Earnings announcements from companies including LVMH Moet Hennessy Louis Vuitton, Telecom Italia and and Banco Santander helped push the Stoxx Europe 600 Index up as much as 0.8 per cent before it pared its gain to 0.4 per cent amid a slide in oil. The moves took benchmark gauges of French, Italian and Spanish equities up more than 1 per cent, the biggest increases among western-European markets.

Deutsche Bank slid 3.2 per cent after saying profit was almost wiped out by a slump in trading revenue and costs tied to job reductions.

What happened yesterday

Shares ended the day up by the slimmest of margins after inflation data failed to boost bets the RBA will cut rates next week, while Fortescue jumped to two-year highs as resources stocks rallied.

Mining stocks gave the market its support, as the heavyweight banks ended the session mixed and interest-rate sensitive sectors such as utilities and listed property sold off.

The S&P/ASX200 Index closed two points higher to 5539.7, while the broader All Ordinaries Index also edged higher to 5615.