US housing starts rose by a larger than expected 7.2pct to a seasonally adjusted rate of 549,000 in March. New building permits advanced by a sharper than expected 11.2pct to 594,000 in March, rebounding from February´s record low.

The ICSC reported that US chain store sales rose 0.3pct last week compared with the prior week. Sales are expected to rise by around 5-6pct in April.

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US treasury Secretary Timothy Geithner said there was ´´no risk´´ that the US would lose its AAA credit rating.

European shares bounced on Tuesday lifted by upbeat corporate earnings. Luxury retailer Burberry posted a robust quarterly profit result that saw the stock rise 6pct. European carmakers recorded healthy gains. The FTSEurofirst index rose 0.4pct. The German Dax gained 0.2pct and the UK FTSE rose 0.5pct.

US sharemarkets rallied on Tuesday, partly recovering from the prior sessions sharp losses. The upbeat US housing data, coupled with encouraging earnings results supported the demand for equities. Healthcare firm Johnson & Johnson (up 3.7pct) raised its profit outlook. Across the sectors the S&P materials index was the top gainer rising 1.8pct. The Dow Jones index rose 65pts or 0.5pct with the S&P 500 higher by 0.6pct while the Nasdaq gained 10pts or 0.4pct.

US treasuries rose on Tuesday (yields lower). Investors were concerned that if the US government cuts spending to curb its budget deficit it could slow economic growth and in turn ensure that interest rates remain low for an extended period. US 2yr yields fell by 2pts to 0.653pct and US 10yr yields fell by 1pt to 3.365pct.

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The US dollar fell against major currencies as the US debt-burden continued to be a concern for investors. The Euro rallied from lows near US$1.4205 to US$1.4345, ending US trade near US$1.4330. The Aussie dollar rose from lows near US104.45c to US105.25c ending US trade near its highs. And the Japanese yen traded between 82.75 yen per US dollar to near JPY82.35, before closing US trade at JPY82.55.

US crude oil prices edged higher on Tuesday as the weaker dollar and rising equity markets supported the bid for oil. The Nymex crude oil contract rose by US$1.03 or 1pct to US$108.15 a barrel. The London Brent crude fell by US28c to US$121.33 a barrel.

Base metal prices were mostly higher on the London Metal Exchange on Wednesday. The upbeat US housing data coupled with the weakness in the US dollar supported the demand for commodities. The gold price rose to fresh record highs. The Comex gold futures price touched US$1500.50 an ounce, before closing up US$2.20 an ounce to US$1,495.10.

Ahead: In Australia, March quarter import and export price data is released. In the US, existing home sales figures are expected.

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