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Oil prices slid to six-month lows on Wednesday and world shares killed time ahead of the year's final Federal Reserve policy decision and clues about the timing of next year's rate cuts.

Traders also were digesting the impact of an agreement from the COP 28 climate summit to begin reducing global consumption of fossil fuels, as well as Argentina's plan to weaken its peso over 50%, cut energy subsidies and cancel tenders of public works.

Brent bottomed at $72.51 a barrel, its lowest since late June. U.S. crude slid to $68.71 a barrel on concerns of softening demand as global economic growth slows, and oversupply after the U.S. Energy Information Administration raised its forecast for U.S. supply in 2023 by 300,000 barrels per day, and a jump in shipments of Russian crude. [O/R]

MSCI's broadest index of shares around the world was flat on the day, resting around its highest level since early August.

A jump past July's top, less than 1% away, would take the benchmark to a 20-month high, having been boosted in recent weeks by expectations of meaningful interest rate cuts next year, while economic growth in the U.S. remains resilient.

The Fed takes centre stage on Wednesday, where it is due to announce its rate decision at the conclusion of its two-day policy meeting.

Markets are all but certain policymakers will keep rates on hold, expectations that Tuesday's U.S. inflation data, largely in line with consensus, did nothing to alter.

That leaves the attention on Powell's press conference and the Fed's dot plot of future policy trajectory, to see how far it diverges from markets current pricing of over 100 basis points of U.S. rate cuts by the end of next year.

"We need to be focused on what the Fed - and ECB - are going to say, and what pushback to current pricing we'll get. Fundamentals justify a recalibration of monetary policy, but not the extent that is priced in," said Samy Chaar, chief economist at Lombard Odier.

The European Central Bank, the Bank of England, the Norges Bank and the Swiss National Bank meet on Thursday.

European shares edged higher with the broad STOXX benchmark up 0.2% trading around its highest since February 2022, with the German and French benchmarks both around record highs.

U.S. share futures ticked higher after U.S. stocks closed on Tuesday at fresh highs of the year and the Cboe Volatility Index dropped to a near four year low. [.N]

ARGENTINA

Eyes were also on Argentina where Economy Minister Luis Caputo launched economic shock therapy aimed at fixing the country's worst crisis in decades.

Sharp moves in Argentine peso "non-deliverable" forwards on Wednesday suggested traders were betting the peso's value would continue to dive after the country's new government said it would devalue currency by over 50% to 800 per dollar.

"Our first impression of the announcement is positive. Fiscal profligacy is the root of Argentina’s macroeconomic problems and moving swiftly with the fiscal adjustment is utmost important," said analysts at Goldman Sachs.

In Britain, data showed the economy shrank in October, raising the risk of a recession and testing the Bank of England's resolve to stick to its tough anti-inflation line against cutting interest rates from their 15-year high.

Rate-sensitive, two-year gilt yields were down nearly 5 basis points at 4.45%, their lowest in around a month, and the pound dropped 0.2% against the dollar to $1.2562, also softening against the euro. [GBP/]

Germany's two-year yield was flat on the day at 2.71%, and the two-year Treasury yield was steady at 4.722%, having earlier in December hit a roughly six-month trough of 4.540%.

The benchmark U.S. 10-year yield steadied at 4.2063%, not far from its lowest in three months. [US/]

Chinese markets on Wednesday had their chance to react to an agenda-setting meeting of China's top leaders, following which state media said after market close on Tuesday Beijing would step up policy adjustments to support an economic recovery in 2024.

Chinese blue-chip stocks sank 1.7% on Wednesday, while Hong Kong's Hang Seng Index fell 0.9%, as the absence of strong stimulus measures at the Central Economic Work Conference left investors disappointed. [.SS]

In commodity markets, gold slipped to a more than three-week low of $1,973.35 an ounce. [GOL/]