The US conference board employment trends index fell from 97.4 to 96.7 in August. The index is still up 9.4pct on a year ago.

European shares fell from four month highs on Tuesday. Investors locked in profits following the seven session winning streak. The Miners were under pressure as Australian tax fears resurfaced. German manufacturing orders fell 2.2 per cent in July - the biggest fall since February 2009 and well below forecasts which centred on a gain of 0.5pct. The FTSEurofirst index fell by 0.4pct while the UK FTSE lost 0.6pct and German Dax similarly gave back 0.6pct.

US sharemarkets fell on Tuesday as concerns about European banks were once again in focus. A Wall Street Journal commented that the recent European bank stress tests understated some lenders holdings of risky government debt. The KBW banking index lost 2.4pct. Also weighing on the banks was fears that Germany´s 10 biggest banks may need 105 billion in new capital under Basel-III. The Dow Jones fell by 107pts or 1.0pct with the S&P 500 down 1.2pct and the Nasdaq lower by 25pts or 1.1pct.

US treasuries bounced after the past three sessions of losses on Tuesday (yields lower). The $33 billion bond auction for 3yr treasuries met strong demand and supported the bid for treasuries. US 2yr yields fell by 4pts to 0.49pct and US 10yr yields lost 10pts to 2.60pct.

Major currencies fell against the greenback in European and US trade on Tuesday as European banking concerns weighed on sentiment. The Euro fell from highs near US$1.2810 to US$1.2680, ending US trade near US$1.2695. The Aussie dollar fell from US91.45c to US90.95c, ending US trade near US91.10c. And the Japanese yen traded between 84.10 yen per US dollar to JPY83.50, ending US trade near JPY83.80c.

US crude oil prices fell on Tuesday as tropical storm Hermine did not disrupt oil production in the Gulf of Mexico. The strength in the US dollar also weighed on the oil price. However the oil price did recover part of the losses following a explosion in Mexico´s third biggest refinery. The Nymex crude oil contract fell by US51c or 0.7pct to US$74.09. London Brent crude rose by US57c to US$777.44 a barrel.

Base metal prices fell on the London Metal Exchange on Tuesday as investors sold of riskier assets such as commodities on the back of renewed concerns about the European banking sector. Most metals fell between 0.3-1.3pct, however nickel rose by 0.2pct. And gold finished at a record closing higher as investors focussed on safe-haven assets. Comex gold futures rose by US$8.20 an ounce to US$1,259.30.

Ahead: In Australia, housing finance figures are released. In the US consumer credit data and the Federal Reserve´s Beige book are released.