The New York empire manufacturing index fell from +11.88 to -7.79 in June. The result was well below expectations with analysts expecting a reading around +12.5. Across the sub indices, new orders and shipments were weaker.

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US consumer prices rose by 0.2pct in May after rising by 0.4pct in April. But in 12 months to May, consumer prices rose 3.6pct - the biggest increase since October 2008. Core prices rose 0.3pct in May modestly ahead of expectations centred on 0.2pct rise.

European shares fell on Wednesday as investors voiced their disappointment following the weak US economic data. Sovereign debt concerns were once again in focus following protests in Greece. Financial stocks were weaker after ratings agency Moody´s put French banks under review for a downgrade due to exposure to Greek debt. The STOXX Europe 600 banking index fell 1.9pct. The FTSEurofirst index fell by 1pct, the German Dax lost 1.3pct, and the UK FTSE fell 1pct.

US sharemarkets slumped on Wednesday as the latest US
manufacturing data turned negative for the first time since November. The escalating Greek debt crisis saw financial stocks sold off. The KBW bank index lost 1.6pct. Energy stocks also lost ground after the slide in the oil price. The VIX or ´´fear gauge´´ jumped
16.8pct. The Dow Jones lost 179pts or 1.5pct, while the S&P500 index fell 1.7pct and the Nasdaq lost 47pts or 1.8pct.

US treasury prices rallied (yields lower) on Wednesday Investors switched to safe-haven US bonds as speculation mounted that the Greece debt crisis could escalate. US 2yr yields fell by 7pts to 0.379pct and US 10yr yields lost 13pts to 2.975pct.

The greenback rallied against the Euro and commodity currencies on Wednesday. The Euro fell from US$1.4420 to near US$1.4155 to end US trade near US$1.4165. The Aussie dollar fell from highs near US107.10c to near US105.30c before ending US trade near US105.60c. And the Japanese yen weakened from 80.40 yen per US dollar to JPY81.05, ending US trade near its lows.

US crude oil prices fell on Wednesday following the weak US manufacturing data. The Nymex crude oil contract fell by US$4.56 a barrel on to US$94.81 a barrel - the weakest close in almost four months. And London Brent crude lost US$6.34 to US$113.01 a
barrel.

Base metal prices were all weaker on the London Metal Exchange on Wednesday. The strong US dollar also added to the negative momentum. However the gold price rose with Comex gold futures up by US$1.80 an ounce to US$1,526.20.

Ahead: In Australia, new motor vehicle sales figures and the RBA Bulletin are scheduled. In the US, building permits, housing starts, Philadelphia Fed index, and current account balance are released.

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