The US Federal Reserve chairman Ben Bernanke told the House of Representatives Financial Services Committee that more stimulus could be provided to the economy if needed: ´´The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might re-emerge, implying a need for additional policy support.´´

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US export prices rose by 0.1pct in June with import prices down 0.5pct. Both results were near market forecasts. And the Federal budget deficit narrowed from US$57.64 billion to US$43.00 billion in June.

European shares rebounded from 4-month lows with investors encouraged that the US Federal Reserve could stimulate the economy further if it was required. Solid economic data out of China boosted resource company shares. The FTSEurofirst index rose by 0.7pct, with the German Dax up 1.3pct and the UK FTSE up 0.6pct.

US sharemarkets rose on Wednesday, but finished well off their highs, with investors heartened that Ben Bernanke didn´t close the door on any further stimulus for the US economy. And shares in News Corp rose 3.8pct after it withdrew its bid to purchase the remaining 61pct in British Sky Broadcasting Group PLC (BSkyB). The Dow Jones rose by almost 45pts or 0.4pct, after being up 164pts at one stage. The S&P 500 gained 0.3pct and the Nasdaq rose by 15pts or 0.5pct.

US treasuries ended little changed on Wednesday. Investors weighed up hopes of more economic stimulus, a solid 10-year note auction and lingering concerns about the European debt crisis. US 2yr yields were flat at 0.355pct and US 10yr yields were stable at 2.88pct.

The US dollar fell against major currencies after Fed chief Ben Bernanke refused to rule out more stimulus for the US economy. The Euro rose from lows near US$1.3990 to almost US$1.4195, ending US trade at US$1.4150. The Aussie dollar rose from lows near US105.25c to US107.75c before ending US trade near US107.45c. And the Japanese yen strengthened from 79.55 yen per US dollar to JPY78.85, and ended US trade near JPY79.00.

US crude oil prices rose again on Wednesday. A weaker US dollar, strong Chinese economic data and hopes of more economic stimulus in the US drove prices higher. Nymex crude oil rose by US62c to US$98.05 a barrel and London Brent crude rose by US$1.39 to US$119.14 a barrel.

Base metal prices were generally higher on the London Metal Exchange on Wednesday except lead which fell 1.3pct. Other metals rose up to 1.4pct. And the gold price hit fresh record highs as the greenback sank. Comex gold rose by US$23.20 an ounce or 1.5pct to US$1,585.50.

Ahead: In Australia, data on inflation expectations is released together with detailed labour market data. In the US, data on producer prices, retail sales and weekly jobless claims are released.

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