Investing.com - Here are the top five things you need to know in financial markets on Wednesday, January 6:
1. North Korea successfully conducts hydrogen bomb test
North Korea confirmed on Wednesday that it had successfully tested its first hydrogen bomb, marking the fourth time the country has detonated a nuclear device.
The explosion was initially detected as a magnitude 5.1 earthquake by various geological agencies.
2. Global stock markets fall in risk-off trade
Global stock markets tumbled in risk-off trade on Wednesday, after North Korea said it had conducted a successful nuclear test and as tensions between Saudi Arabia and Iran remained high.
Asian shares fell on Wednesday, with markets in Japan, Australia and Hong Kong all closing deep in the red. However, China shares bucked the trend with a 2.3% gain, as Beijing stepped up efforts to support the market.
Meanwhile, European stock markets fell sharply, with Germany's DAX down 1.3% as of 10:45 GMT, or 5:45AM ET, while London's FTSE 100 dropped 1.2%, as the downbeat mood from Asia spilled over.
Elsewhere, Wall Street pointed to heavy losses at the open, with the Dow down 210 points, or 1.3%. On Tuesday, U.S. stocks closed mixed amid pressure from declines in oil prices and Apple (O:AAPL) stock.
3. Brent oil slides to fresh 11-year low
Brent oil prices fell to the lowest level since July 2004 on Wednesday, as worries over the health of the global economy added to the concerns that a global supply glut may stick around for longer than anticipated.
Brent was last down $1.29, or 3.54%, to $35.13 a barrel, after hitting a session low of $34.84, a level not seen in more than a decade, while U.S. crude dipped 91 cents, or 2.52%, at $35.06.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 10:30AM ET Wednesday.
4. China's yuan hits fresh 5-year low
The People's Bank of China set the yuan's official midpoint rate at its lowest level since April 2011, amid persistent worries over an economic slowdown and capital outflows.
The tightly managed onshore yuan traded at 6.5532 (USD/CNY), while its freer offshore counterpart stood at 6.7141 (USD/CNH), widening the gap between the two to 2.4%.
Some market players see the tactic as an attempt by China to shore up growth, prompting concerns that the world's second-biggest economy could be even weaker than imagined.
5. U.S. data, FOMC minutes ahead
The U.S. is to release the ADP jobs report for December at 8:15AM ET, followed by data on the trade deficit at 8:30AM. At 10:00AM, the U.S. Institute of Supply Management is to report on service sector growth for December, while data on November factory orders is due at the same time.
Investors will also be focusing on minutes of the December Federal Reserve meeting due at 2:00PM ET. The Fed raised interest rates for the first time since 2006 last month and pledged that future rate hikes will be gradual and data dependent.