US chain store sales rose by 3.3pct in the week to January 7 compared with a year ago according to the Johnson Redbook Retail Sales index. US wholesale sales rose by 0.6pct in November with inventories up just 0.1pct. Economists had tipped a 0.7pct lift in sales and 0.5pct lift in inventories. The slower level of business restocking may serve to crimp the economic growth estimate for the December quarter.

French industrial production rose by 1.1pct November to stand 0.9pct higher than a year ago. The Bank of France business sentiment indicator turned up for the first time in nearly a year, edging up to 96 in December from 95. This maintains the pattern of stabilisation across European business surveys in late 2011.

European shares posted solid gains on Tuesday with investors encouraged by earnings news in the US and hopeful of more stimulus to be applied to the Chinese economy. Ratings agency Fitch also said that it does not expect to change France´s AAA rating this year. The FTSEurofirst index rose by 1.8pct with the UK FTSE up 1.5pct and German Dax gaining 2.4pct.

US sharemarkets rose sharply at the start of trade and then drifted lower over the session. Investors were encouraged by the latest economic data across the globe and the latest earnings result from Alcoa. At the close of trade, the Dow Jones was up 69.8 points or 0.6pct after being up 122pts at the open. The S&P 500 was up 0.9pct and the Nasdaq was up 26pts or 1.0pct.

US treasuries rose modestly on Tuesday (yields lower) as traders and investors maintained their cautious stance to developments in Europe, China and the US. US 2yr yields fell 1pt to 0.244pct and US 10yr yields were steady at 1.97pct.

Major currencies were firmer against the US dollar in European trade but eased in US trade to settle near the levels reached at the end of the Asian session. The Euro held between $1.2740 and US$1.2820 and was near US$1.2775 in late US trade. The Aussie dollar rose from US102.80c to US103.50c, and was around US103.05c in late US trade. And the Japanese yen held between 76.74 yen per US dollar and JPY76.92, and was near JPY76.80 in late US trade.

World crude oil prices rose on Monday. Investors adopted a less defensive stance, embracing equities and commodities. EU governments will meet on January 23 to decide on an embargo of Iranian oil. Nymex crude oil rose by US93c or 0.9pct to US$102.24 a barrel and London Brent crude rose by US83c to US$113.28 a barrel.

Base metals rose on Tuesday on hopes that China will ease monetary policy to boost growth. Metals rose between 1.3-3.3pct with copper doing best after data showed Chinese copper imports rising to record highs last month. And the gold price rose for the first time in three days in line with other commodities. The Comex February gold price rose by US$23.40 or 1.5pct to US$1,631.50 an ounce.

Ahead: In Australia, data on job vacancies is released. In the US, the Beige Book and the weekly mortgage market index are released.