07:56 AM EDT, 05/07/2025 (MT Newswires) -- Developments out of China and expectations into later Wednesday's FOMC communications are the main focal points in markets, said Scotiabank.

Risk appetite is mixed with United States and Canadian equity futures rallying by over 0.5% but European benchmarks down by up to 0.75%, noted the bank. Chinese equities rallied in response to the PBOC's moves overnight Tuesday and trade headlines, but quickly pared some of that initial gain.

India's Sensex was little changed after a further escalation of India-Pakistan tensions, stated Scotiabank.

The US dollar is slightly firmer, added the bank. Sovereign bonds are also mixed with mild cheapening of U.S. Treasuries but mild rallies across European curves.

Brazil's central bank (BCB) is expected to downshift the pace of hikes to 50bps with the policy statement due out at 5:30 p.m. ET Wednesday.