U.S. equity futures rose slightly in premarket trading as Congressional leaders appear closer to a deal to at least mute some of the effects of the automatic tax hikes and spending cuts caused by the fiscal cliff. It is true that many of measures do not take effect immediately and leaders would have time should no deal be reached by January 1, but the faster a deal is reached, the better.

In other news, the German IFO Business Confidence Survey rose to 102.4 in December from 101.4 in November and was better than expectations of a reading of 102. The survey is a strong economic indicator and points to slightly better than expected growth in Germany for December.

Spanish Industrial Activity rose 5.5% in December, well above the consensus forecast of a 3.5% contraction and better than the previous reading of a 6.2% contraction.

Fitch has warned that going over the fiscal cliff would jeopardize the U.S.'s AAA rating with the rating agency, as a failure to avoid it would most likely send the U.S. back into recession.

• S&P 500 futures rose 1.75 points to 1,446.79.
• The EUR/USD was higher at 1.3277.
• Spanish 10-year government bond yields fell to 5.283%.
• Italian 10-year government bond yields fell to 4.395%.
• Gold rose 0.37% to $1,676.90 per ounce.

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Commodities

Commodities were mostly higher in overnight trade, boosted by global growth hopes. WTI crude futures rose 0.38% to $88.26 per barrel and Brent crude futures rose 0.56% to $109.45 per barrel. Copper futures fell 0.14% as Chinese shares lagged despite the strength in Australian miners overnight. Gold was higher and silver futures rose 0.26% to $31.75 per ounce.

Currencies

Currency markets were in clear risk-on mode overnight as investors sold the dollar and bought other currencies. The EUR/USD was higher at 1.3277 and the dollar rose against the yen to 84.40. Overall, the Dollar Index fell 0.3% overnight on weakness against the euro, the yen, the pound, the Swiss franc, and the Swedish krone. The British pound was stronger overnight following the release of the Bank of England's Monetary Policy Committee minutes showed that authorities were in large agreement to keep rates on hold and not increase its asset purchase program.

Premarket movers

Stocks moving in the premarket included:

• UBS (UBS) shares rose 0.12% premarket after the company agreed a $1.5 billion fine with regulators over the Libor rigging scandal. However, some employees may face criminal charges in London as regulators found bribery in some employees.
• Alcoa (AA) shares fell 1.8% premarket after Moody's placed the company's credit rating on review for a downgrade because low steel prices continue to crimp margins.
• Altria (MO) shares rose 1.26% premarket as several tobacco companies reached an agreement with 17 states over payment-adjustment disputes.
• BHP Billiton (BHP) shares rose 1.2% premarket and Australian traded shares rose overnight on hopes that a fiscal cliff deal would help boost demand for metals.

Earnings

Notable companies expected to report earnings Wednesday include:

• Bed Bath & Beyond (BBBY) is expected to report third quarter earnings per share of $1.02 vs. $0.95 a year ago.
• FedEx (FDX) is expected to report second quarter earnings per share of $1.41. vs. $1.57 a year ago.
• General Mills (GIS) is expected to report second quarter earnings per share of $0.79 vs. $0.76 a year ago.
• Navistar (NAV) is expected to report a fourth quarter loss of $1.12 per share vs. a profit of $3.37 per share a year ago.

Economics

On the economics calendar Wednesday, MBA Purchase Applications and Housing Starts data are due out, followed by the EIA Petroleum Status Report. In addition, the Treasury is expected to auction seven-year notes. Overnight, the Bank of Japan interest rate decision is expected as well as German inflation data.

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