US jobless claims fell 31k to 473k in the past week. Those people remaining on unemployment benefits after drawing an initial week of aid fell 62k to 4.46 million. The US Chicago Fed manufacturing index rose 2.2pct to 81.4 in July. Midwest auto sector production and steel output both recorded healthy gains in July.

European shares bounced off five-week lows on Thursday as bargain hunting supported equities. Miners were amongst the top performers, supported by a rally in base metals. The FTSEurofirst index rose by 0.8pct while the UK FTSE gained 0.9pct and the German Dax rose by 0.2pct.

US sharemarkets gave back early gains on Thursday as traders awaited on a major speech by Fed Reserve Chairmen Bernanke. Initially the better than expected jobless data supported markets. However the anticipated downward revision to US GDP (on Friday) weighed on investor sentiment throughout the session. Technology stocks were the hardest hit. The Dow Jones fell below 10,000 points, ending lower by almost 74pts or 0.7pct. The S&P 500 fell by 0.8pct and the Nasdaq lost almost 123ts or 1.1pct.

US treasuries rallied on Thursday (yields lower) following strong demand for the auction of $29 billion in 7yr notes. The bid to cover ratio was 2.98 - the second highest reading on record. US 2yr yields fell by 1pts to 0.52pct and US 10yr yields were lower by 6pts to 2.54pct.

The Euro and commodity currencies rallied in European trade before giving back ground late in US trade. The Euro rose from lows near US$1.2665 to US$1.2755, ending US trade near US$1.2720. The Aussie dollar rose from lows near US88.55c to US89.15c, ending US trade near US88.70c. And the Japanese yen strengthened from 84.75 yen per US dollar to JPY84.30, ending US trade near JPY84.45.

US crude oil prices rose for the second straight session as the better than expected jobless claims data and the weaker US dollar attracted investors to commodities. The October Nymex crude oil futures contract rose by US84c or 1.2pct to US$73.36. London Brent crude rose by US$1.67 to US$75.15 a barrel.

Base metal prices rallied on the London Metal Exchange on Thursday, in response to better-than-expected data on US jobless claims. Also a strong earnings result for Swiss mining giant Glencore supported a rally in commodities. Lead gained 3.4pct and Zinc rose 4.5pct. But the Comex gold price bucked the trend, easing after touching eight week highs. Comex gold fell by US$3.60 an ounce to US$1,237.70.

Ahead: In Australia, no economic data is released. Earnings results are expected from Harvey Norman, Fairfax and Sims Metal. In the US GDP and University of Michigan confidence figures are released.