MORNING REPORT
(8.00am AEDT)

US jobless claims fell by 4,000 to 364,000 in the last week - marking a fresh 3½ year low. The final estimate of US GDP showed the economy expanded at 1.8pct in the September quarter (previously reported at 2pct). The University of Michigan consumer sentiment index rose from 64.1 to 69.9 in November - its highest level in six-months. The survey´s one-year inflation expectation edged lower from 3.2pct to 3.1pct.

European shares rose on Thursday boosted by the upbeat US economic data. Investors also took a more positive view of the ECB 3-year lending facility. The ultra-cheap funding should help European banks recapitalise their balance sheets. The Euro zone banking index rose 2.1pct. The FTSEurofirst index rose by 1.1pct with the UK FTSE up by 1.3pct while the German Dax gained 1.1pct.

US shares were higher on Thursday though volumes were light. Cyclical stocks were the top gainers following the better than expected US economic data. The S&P Financials index rose 1.8pct while the Material index gained 1pct. The CBOE Volatility index fell 0.6pct and was down about 13pct in the past week. At the close of trade, the Dow Jones was higher by 62pts with the S&P 500 rose 0.8pct and the Nasdaq was higher by 21pts or 0.8pct.

US long-dated treasuries recorded modest gains on Thursday (yields lower) boosted by the Federal Reserve´s final buyback for the year. The Fed bought back $4.62 billion in 10yr notes in its ´´Operation Twist´´ program - designed to lower longer term interest rates. Overall trading volumes were light. US 2yr yields were flat at 0.279pct and US 10yr yields fell by 2pts to 1.949pct.

Major currencies rallied against the greenback on Thursday on the better than expected US economic data. The Euro hit early highs near US$1.3115 before falling to lows around US$1.3025 and headed into the US close near US$1.3050. The Aussie dollar rose from lows around US100.75c to US101.50c, and was near US101.25c in late US trade. And the Japanese yen traded between JPY77.95 yen per US dollar and JPY78.00, ending US trade near JPY78.15.

US crude oil prices rallied on Thursday in a volatile trading session. Violence in Iraq and a upcoming Iranian military exercise raised concerns about potential supply disruptions. Nymex crude oil rose by US86c or 0.9pct to US$99.53 a barrel and London Brent crude rose by US18c to US$107.89 a barrel.

Base metal prices were mostly higher on the London Metal Exchange on Thursday supported by the upbeat US economic data. Metals rose 0.2pct-1.9pct with the exception of Nickel down 1.5pct. And the Comex gold price eased by US$3 an ounce to US$1,610.60.

Ahead: In Australia no economic data is released. In the US, new home sales, durable goods orders and personal income and spending data are released.