US existing home sales fell by 0.8pct in April, against expectations of a 2pct rise. The median home price was $163,700 in April, down 5pct on a year ago. US jobless claims fell by a larger than expected 29,000 to 409,000 last week.

The Philadelphia Fed business activity index fell from 18.5 to 3.9 in April - marking a seven month low. The new orders sub-index was sharply weaker. The employment index was the only encouraging sign up from 12.3 to 22.1 in April. The Conference Board US leading indicators index fell 0.3pct in April marking its first decline since June last year - suggesting the ´´pace of economic activity may be choppy´´ in coming months.

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European shares rallied on Thursday. The rise in equities was broad based but finished of their highs following the mixed signals on the US economy. The energy sector gained 1.1pct following a broker upgrade for BP (up 1.9pct). The FTSEurofirst index closed up 0.6pct while the German Dax rose by 0.8pct and the UK FTSE was up by 0.6pct.

US sharemarkets rallied for the second straight session on Thursday in relatively low volumes. Shares of LinkedIn - the social network company - more than doubled on debut. The Dow Jones rose 45pts or 0.4pct with the S&P 500 up 0.2pct and the Nasdaq gained 8pts to 0.3pct.

US treasuries recorded modest gains on Thursday (yields lower) as investors took advantage of early weakness in prices to add to positions. US 2yr yields fell by 4pts to 0.53pct and US 10yr yields fell by 1pt to 3.17pct.

The US dollar fell against major currencies on Thursday, as the weak US economic data indicated the Fed was unlikely to move on rates anytime soon. The Euro rallied from lows near US$1.4210 to US$1.4325, before ending US trade near US$1.4310. The Aussie dollar rallied from lows near US105.95c to US106.75c before ending US trade near US106.65c. And the Japanese yen traded between 82.20 yen per US dollar and JPY81.45, ending US trade near its highs.

US crude oil prices fell on Thursday. The International Energy Agency urged OPEC producers to supply more oil and suggested that it may release emergency stocks if OPEC failed to act at its June 8 policy meeting. The Nymex crude oil contract fell by US$1.66 or 1.7pct to US$98.44 a barrel and London Brent crude fell by US88c to US$111.42 a barrel.

Base metal prices were mixed on the London Metal Exchange on Thursday, with copper falling by 1.3pct. Investors remained cautious following the weak US economic data which suggested that the pace of the recovery may be slowing. And the gold price fell on Thursday, with Comex gold futures down by US$3.40 an ounce to US$1,492.40.

Ahead: In Australia, no economic data is released. Similarly in the US, no economic data is slated for released.

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