US chain store sales rose by 3.1pct last week compared with a year ago according to Redbook Research. But a report by the International Council of Shopping Centers showed spending up by a stronger 3.9pct rate on a year ago. US mortgage refinancings soared by 9.2pct in the past week to a nine-month high according to the Mortgage Bankers Association. But demand for mortgages to buy new homes slipped 2.0pct.

European shares rose on Wednesday after a profit upgrade by US custody bank, State Street, buoyed spirits of investors. But miners were mixed with BHP Billiton up 0.7pct in London trade with Rio Tinto lower by 0.4pct. The FTSEurofirst index rose by 1.5pct with the UK FTSE up 1.0pct and the German Dax lifted by 0.9pct.

US sharemarkets soared on Wednesday after State Street indicated that its earnings would be well above analyst forecasts. State Street expects earnings of 93c a share, ahead of analyst forecasts of earnings of 72c a share. Other bank stocks soared in response to the news. Bank of America was up 4.6pct with Morgan Stanley up 4.3pct. The Dow Jones rose by 274 points or 2.8pct with the S&P 500 up 3.1pct, and the Nasdaq gained 65 points or 3.1pct.

US long-term treasuries fell on Wednesday (yields higher) with investors moving back into the equities markets and reducing holdings of government bonds. US 2yr yields were largely flat near 0.63pct with US 10yr yields up 4pts to 2.98pct.

The Euro and commodity currencies rallied for a second day against the US dollar and Japanese yen as investors became less risk averse. The Euro rose from lows near US$1.2555 to US$1.2660, ending the US session near US$1.2645. The Aussie dollar rose from lows near US84.50c to US86.60c, ending the US session near US86.45c. But the Japanese yen weakened from 87.00 yen per US dollar to JPY87.75, ending US trade near JPY87.65.

US crude oil prices rose for the first time in seven days as investors embraced equities and commodities and the US dollar fell. A weaker dollar improves the purchasing power of commodity buyers in Europe and Asia. Traders were also watching the progress of a tropical depression near Mexico that could disrupt oil production in the Gulf of Mexico. The Nymex crude oil contract rose by US$2.09 or 2.9pct to US$74.07. London Brent crude rose by US$2.06 to US$73.51 a barrel.

Base metal prices were modestly higher on the London Metal Exchange on Wednesday except aluminium which slipped 0.3pct. Other metals rose between 0.2-1.3pct. And the gold price lifted on Wednesday with bargain hunters drifted back after prices hit 6-1/2 week lows. The Comex gold price rose by US$3.80 an ounce to US$1,198.90.

Ahead: In Australia, the June employment report is released. In the US, weekly jobless claims data is released.

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