The US ISM manufacturing index surprisingly rose from 55.5 to 56.3 in August. Economists had tipped a fall to 53.0. Construction spending fell by 1.0pct in July, against forecasts for a 0.5pct decline. The ADP employment index showed that private employers cut 10,000 jobs in August. But planned job layoffs fell to a 10-year low in August according to the Challenger survey.

European shares recorded their biggest daily gains in three months on Wednesday in response to solid manufacturing data in both the US and China. Miners did well - in London trade shares in Rio Tinto rose by 6.1pct with BHP Billiton up 3.9pct. The FTSEurofirst index rose by 2.9pct while the UK FTSE and the German Dax both lifted by 2.7pct.

US sharemarkets posted their best gains in eight weeks as investors focussed on the strong manufacturing data rather than soggy employment figures. Industrial and basic materials stocks did best with Caterpillar up 4.6pct. Shares in Burger King rose 14.7pct after putting itself up for sale. The Dow Jones rose by almost 255pts or 2.5pct with the S&P 500 up 3.0pct and the Nasdaq lifted almost 63pts or 3.0pct.

US treasuries fell on Wednesday (yields higher) as investors latched on to solid manufacturing data in both the US and China - the two biggest global economies. US 2yr yields rose by 3pts to 0.505pct and US 10yr yields rose by 10pts to 2.58pct.

The Euro and commodity currencies rose against the greenback in European and US trade on Wednesday. The Euro lifted from US$1.2700 to US$1.2850, ending US trade near US$1.2810. The Aussie dollar lifted from US89.80c to US91.10c, ending US trade near the day's highs. But the Japanese yen eased from 83.70 yen per US dollar to JPY84.65, ending US trade near JPY84.40c.

US crude oil prices rose for the first time in three days with investors encouraged by stronger manufacturing gauges in both the US and China. The rise came despite a 3.4 million barrel lift in US crude stockpiles in the latest week. Investors were also watching the progress of tropical storms and hurricanes in the eastern Atlantic Ocean. The Nymex crude oil contract rose by US$1.99 or 2.8pct to US$73.91. London Brent crude rose by US$1.77 to US$76.35 a barrel.

Base metal prices posted solid gains on the London Metal Exchange on Wednesday as investors were encouraged by stronger manufacturing readings across the globe. Metals rose between 1.7-3.4pct with zinc doing best and nickel lagging. But gold went against the trend as investors backed away from safe-haven assets. Comex gold futures fell by US$2.20 an ounce to US$1,248.10 after ranging between US$1,244.10 to $1,256.60 an ounce.

Ahead: In Australia, trade data for July is released. In the US factory orders, productivity, pending home sales and weekly jobless claims data are released.