Asian stocks showed some resilience on Wednesday as investors speculated whether the Federal Reserve could take a dovish turn in its post-meeting statement later in the session, amid signs a stronger dollar was hurting U.S. corporate profits.
Apple Inc (AAPL.O) also provided some relief after the bell as record iPhone sales helped it beat expectations, sending its stock up more than 5 percent.
Yahoo Inc (YHOO.O) gained more than 6 percent in after-hours trading on its plans to spin off its 15 percent stake in China's Alibaba Group Holding Ltd (BABA.N), responding to pressure to hand its prized e-commerce investment over to shareholders.
Those moves helped U.S. stock futures ESc1 rise 0.7 percent in Asia even as earnings from other U.S. majors generally disappointed, with multinationals from DuPont (DD.N) to Microsoft Corp (MSFT.O) complaining that a strong U.S. dollar was hurting profits.
European shares were expected to keep their bullish tone since the European Central Bank unveiled quantitative easing last week, with spreadbetters seeing rise of around one percent in Britain's FTSE .FTSE, Germany's DAX .GDAX and France's CAC40 .FCHI.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS ticked up 0.2 percent to hit a four-month high while the Nikkei .N225 also gained 0.2 percent to one-month high.
"The ECB quantitative easing was very powerful. Asian markets saw big fund inflows. The falls in oil prices reduced inflation risk, allowing many central banks in emerging markets to ease policy," said Yukino Yamada, senior strategist at Daiwa Securities
Singapore's central bank in fact eased monetary policy unexpectedly on Wednesday ahead of its scheduled review in April, joining a growing list of central banks that took steps to counter disinflation and slowing growth.
The latest U.S. economic news was mixed with surprisingly soft durable goods orders, but notable strength in housing and consumer sentiment.
Soft business investment and corporate earnings stoked talk the Fed would have to acknowledge the more difficult environment in its policy statement at 1400 GMT.
So far, the Fed has stuck by plans to raise interest rates around the middle of 2015, but markets have relentlessly pushed the timing out to year-end and are plotting a much lower trajectory for future hikes.
Fed funds <0#FF:> imply a rate of only 45 basis points by December, compared to the current effective funds rate of 12 basis points.
"The market now thinks a rate hike around June is unlikely. So if the Fed does not change its tone, the market will take it as a bit more hawkish than expected," said Tomoaki Shishido, fixed income analyst at Nomura Securities.
Just the risk of a dovish turn was enough to force speculators to cut back on crowded short positions in the euro, lifting the common currency to $1.1372 EUR= and away from Monday's 11-year low of $1.1098.
The dollar dipped to 117.92 yen JPY= and retreated against a basket of major currencies to 94.092 .DXY, off an 11-year high of 95.481 hit on Friday.
In commodity markets, oil prices were pressured by news U.S. oil stockpiles surged by nearly 13 million barrels last week. [API/S]
Brent crude oil LCOc1 dipped to $49.01 a barrel while U.S. crude oil futures CLc1 slipped to $45.57.
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