US existing home sales rose from 13-year lows, up by 7.6pct in August - marginally above expectations. The increase in sales lowered the supply of home on the market from 12.5 months to 11.6 months supply. The US leading indicators index rose 0.3pct.

US jobless claims increased by 12,000 to 465,000 in the past week. Markets had expected claims to remain steady after the two previous weeks of declines. The number of people remaining on unemployed benefits after drawing an initial week of aid increased by 113,000 to 4.2 million.

European shares fell on Thursday, following the weaker than expected European data. Euro zone PMI fell to a seven-month low. The FTSEurofirst index fell 0.1pct with the UK FTSE down by 0.1pct and the German Dax lost 0.4pct.

US sharemarkets fell on Thursday, after the weak jobless claims numbers gave investors an opportunity to lock in recent gains. The financial sector was sharply lower with the S&P financial index down 2pct. The CBOE Volatility index rose 6pct. The Dow Jones fell 77pts or 0.7pct with the S&P 500 down 0.8pct and the Nasdaq eased by 8pts or 0.8pct.

US treasuries rallied (yields lower) on Thursday as traders digested the weaker than expected employment data. However afternoon buying by institutional investors kept prices in check. US 2yr yields fell 2pts to 0.42pct and US 10yr yields fell by 2pts to 2.55pct.

The greenback recovered some of the recent weakness against the Euro on Thursday. Concerns over slowing Euro zone growth weighed on the currency. The Euro fell from highs near US$1.3410 to US$1.3310, ending US trade near US$1.3315. The Aussie dollar fell from highs near US95.70c to US94.65c, closing US trade near US95.00c. The Japanese yen held between 84.65 yen per US dollar and JPY84.25, ending US trade near JPY84.35.

US crude oil prices recorded a modest increase on Thursday. News that ConocoPhillips 238,000 barrel per day Bayway refinery in New Jersey had closed for a six-week due to maintenance supported the oil complex. The Nymex crude oil contract rose by US47 cents or 0.6pct to US$75.18. London Brent crude rose US16 cents to US$78.11 a barrel.

Base metal prices were sharply higher on the London Metal Exchange on Thursday. Investors were a bit more optimistic that the economic recovery would gain traction over coming months. Copper gained 0.6pct, with Nickel up 0.9pct and the other metals rose between 2.4-2.7pct. And the Comex gold price rose by US$4.20 an ounce to $1296.30.

Ahead: In Australia, financial accounts are released. In the US durable goods orders, and new home sales are released.