Morning Report.

US existing home sales continued the run of soft US housing market news this week. Sales fell by 0.9pct to a seasonally adjusted pace of 4.59 million units in February.

European shares fell on Wednesday, after the surprisingly weak US housing data. Financial stocks led the losses with the STOXX Europe 600 Banking Index down 0.9pct. The Monetary Policy Committee minutes confirmed ongoing calls for even more stimulus from some MPC members. The release of the UK Budget had limited market impact. The benchmark FTSEurofirst 300 index fell by 0.2pct with the German Dax up 0.2pct. The UK FTSE was virtually flat up just 1 point.

US sharemarkets were mixed on Wednesday with losses recorded across financial and energy stocks. The S&P Financial index lost 0.2pct while the Energy sector gave back 1pct. Hewlett-Packard said it was merging its printer and PC businesses to reduce costs and boost growth, its shares fell 1.8pct. At the close of trade, the Dow Jones was lower by 46pts or 0.4pct with the S&P 500 down by 0.2pct while the Nasdaq gained 1pt.

US treasuries rallied on Wednesday (yields lower) as the weaker than expected housing data helped fuel the bid for safe-haven assets. US 2yr yields fell 3pts to 0.37pct and US 10yr yields fell by 7pts to 2.29pct.

The Euro and commodity currencies eased further against the greenback in overnight trade after Fed Chairman Bernanke commented on the US Dollar - suggesting that eventually it would react to changes in interest rates, and that the Fed's policies were helping the economy without hurting the US currency. The Euro fell from highs around to US$1.3285, to lows near US$1.3180 and was holding near US$1.3210 in last trade. The Aussie dollar fell from highs around US105.20c to US104.25c and was near US104.50c in late US trade. And the Japanese yen traded between 84.10 yen per US dollar to JPY83.40 and was near JPY83.45 in late US trade.

Benchmark crude oil prices rallied on Wednesday following an unexpected drop in US oil inventories. US crude stockpiles fell by 1.16 million barrels last week against expectations for a 2.4 million barrel build. The prospect of supply cuts from Iran and tensions in the Middle East continued to put a floor under prices. US Nymex crude rose by US$1.66 or 1.6pct to US$107.27 a barrel and London Brent crude rose by US8c to US$124.20 a barrel.

Base metal prices were mixed on the London Metals Exchange on Wednesday. The best performer was lead which gained 1.7pct in light volume. Supporting prices was news that China´s imports of refined copper rose by 12pct in February but were still below record levels reached in December. And the gold price recouped some of the previous sessions losses with the April Comex gold price up US$3.30 or 0.2pct to US$1,650.30 an ounce.

Ahead: In Australia, no economic data is released. In the US, the leading indicators index is released.