In European Equity Markets stocks recovered on Wednesday from a muted start to the year as a rising dollar boosted exporters and new records on Wall Street lifted spirits on a day devoted to the implementation of the new European MiFID II market rules. Euro zone blue chips gained 0.6 percent and the pan-European STOXX 600 index closed up 0.5 percent while trading volumes were slightly up from the previous session despite new financial regulations kicking in. Frankfurt’s DAX . and Paris’ CAC 40 both jumped 0.9 percent. Shares in British retailer Next rose 6.7 percent after it raised profit guidance on better than expected Christmas sales. Next is the first major listed retailer to give an update on Christmas trading, but its optimistic update lifted other retailers such as Ocado, up 7.7 percent or Primark owner Associated British Foods, up 2.1 percent.

In Currency Markets the US dollar rallied on Wednesday after upbeat U.S. manufacturing and construction data, snapping a three-week losing streak as investors awaited the release of the Federal Reserve’s December policy meeting minutes. The U.S. currency was on track to post its largest daily gain in more than two weeks. Gains accelerated after data showed U.S. construction spending rose 0.8 percent in November to an all-time high of $1.257 trillion. The dollar bounced 0.3 percent to 92.18 vs yen after falling 2.5 percent the last three weeks. The euro, meanwhile, slid 0.4 percent to $1.2010 after hitting a four-month high of $1.2081 on Tuesday, up roughly 3 percent from a mid-December trough. Friday’s U.S. non-farm payrolls report should provide more clarity about the outlook for interest rates this year.

In Commodities Markets oil prices rose nearly 2 percent on Wednesday to the highest in 2-1/2 years, with buying spurred on by a sixth day of unrest in OPEC member Iran and strong economic data from the United States and Germany. Iran’s elite Revolutionary Guards have deployed forces to three provinces to put down anti-government unrest, their commander said on Wednesday. Six days of protests have left 21 people dead. U.S. West Texas Intermediate (WTI) crude futures were at $61.35 barrel up 1.6 percent at 11:30 a.m. EST  just off the session high of $61.50, their highest since June 2015. International benchmark Brent crude futures were up 1.3 percent at $67.46 a barrel after touching $67.62 a barrel, the highest since May 2015. Spot gold fell 0.4 percent to $1,312.35.

In US Equity Markets the S&P 500 breached the 2,700-mark for the first time shortly after open on Wednesday, while the Nasdaq and the Dow hit records on a strong run in technology stocks. Oracle and IBM rose about 3 percent following brokerage upgrades, helping the S&P technology index gain about 1 percent.S&P 500 was up 0.17 percent, at 2,700.42. The Nasdaq Composite was up 0.3 percent, at 7,028.27. However, gains in the technology sector were limited by a 2 percent decline in Intel following a report that its processor chips had a fundamental design flaw. Rival chipmaker Advanced Micro Devices was up about 5 percent. Other chipmakers Nvidia and Micron were also higher. Harley-Davidson slipped 3.5 percent after brokerage Longbow Research downgraded the company’s stock to “underperform”.

In Bond Markets Euro area borrowing costs edged lower on Wednesday, as a sweeping reform of EU financial market rules took effect a day after hawkish comments by ECB rate-setters triggered a sharp bond market sell-off. Germany’s 10-year government bond yield fell 2 basis points to 0.44 percent, off two-month highs hit on Tuesday after weekend comments from the European Central Bank’s Benoit Coeure that there was a “reasonable chance” ECB stimulus will not be extended this year. Most core euro zone bond yields were down 1-4 bps on the day, with the gap between Italian and German 10-year bonds yields tightened to 160 basis points. Ireland meanwhile kicked off its annual funding drive by raising 4 billion euros with a syndicated 10-year bond, covering around a quarter of its issuance target just three days into the year.