US retail sales were unchanged in August, short of forecasts tipping a 0.2pct rise. Excluding autos, sales rose 0.1pct, again short of forecasts for a 0.3pct rise. Producer prices were flat in August while core prices (excludes food and energy) rose 0.1pct, below forecasts for a 0.2pct gain.

Leaders of France, Germany and Greece held a conference call with French and German leaders saying that they are convinced Greece´s future is in the Euro zone. Greece´s president Papandreou said his country is determined to meet all its obligations.

European shares rose for a second straight day after European Commission president Jose Manuel Barroso pushed a proposal for the introduction of common euro zone bonds. Italian Prime Minister Silvio Berlusconi won a confidence vote on an austerity plan. Shares in Societe General fell by 2.9pct after a ratings downgrade The FTSEurofirst index rose by 1.4pct, the German Dax gained 3.4pct and the UK FTSE rose by 1.0pct.

US sharemarkets rose for a third day but finished well off the highs. The Dow Jones finished higher by 140 points or 1.2pct but it lost 140 points in the last 30 minutes of trade as investors booked profits. The Dow traded over a 393 point range. The S&P 500 rose by 1.4pct while the Nasdaq gained 40pts or 1.6pct.

US long-term treasuries ended flat on Wednesday as equities continued to recover. But short-term yields eased again in response to softer economic data. US 2yr yields fell by 3pts to 0.189pct but US 10yr yields rose by just under a point to 2.00pct.

The US dollar eased against the Euro and commodity currencies over the European and US sessions. The Euro rose from lows near US$1.3590 to around US$1.3780, before ending the US session near US$1.3750. The Aussie dollar rose from lows around US101.75c to US102.90c, ending the US session near US102.70c. And the Japanese yen strengthened from 76.95 yen per US dollar to JPY76.60, before ending US trade near its strongest levels.

Global crude oil prices were again mixed on Wednesday as traders focused on arbitrage opportunities between Nymex and Brent prices. Nymex crude oil fell by US$1.30 or 1.4pct to US$88.91 a barrel and London Brent crude rose by US51c or 0.4pct to US$112.40 a barrel.

Base metal prices were generally weaker on the London Metal Exchange on Tuesday with prices down up to 2.0pct. But nickel rose 0.4pct. And the gold price eased on Wednesday with the Comex December gold price lower by US$3.60 an ounce or 0.9pct to US$1,830.10.
Ahead: In Australia, the Reserve Bank Bulletin, car sales and industry employment estimates are released. In the US, consumer prices, industrial production, weekly jobless claims and the Philadelphia Fed survey are released.