MORNING REPORT
(7am AEST)

The Federal Reserve has kept the policy target range for the federal funds rate at zero to 0.25 basis points. The Fed said the economy has been expanding moderately but vowed to keep rates at exceptionally low rates to 2014. Fed chief Ben Bernanke said that ´´we think monetary policy is in the right place´´ but that ´´doesn´t mean we won´t take further action´´ to stimulate growth.

US durable goods orders fell by 4.2pct in March, weaker than forecasts tipping a 1.7pct fall.

European shares rose for the second straight day, boosted by encouraging earnings results in the US and Europe. The benchmark FTSEurofirst 300 index rose by 1.0pct with the German Dax up by 1.7pct but the UK FTSE rose by only 0.2pct after data showed that it had slid back into recession.

US sharemarkets rose on Wednesday with technology shares leading the way after a solid lift in earnings from Apple. Investors were also comforted by comments from Fed chief Bernanke that more stimulus would be provided if needed. Shares in Apple rose by 8.9pct in response to better-than-expected earnings. The Dow Jones rose by 89pts or 0.7pct with the S&P 500 up by 1.4pct while the Nasdaq gained 68pts or 2.3pct.

US treasuries were little changed on Wednesday. While the Federal Reserve was more positive on economic conditions, Fed chief Bernanke didn´t close the door on more stimulus. And economic data was weaker than expected. US 2yr yields fell 1pt to 0.27pct and US 10yr yields rose 1pt to 1.99pct.

The Euro and commodity currencies rose against the greenback in US and European trade. The Euro held between lows around US$1.3175 to highs near US$1.3230 and ended US trade at US$1.3215. The Aussie dollar rose from lows around US103.05c to highs of US103.60c and ended US trade near the highs. And the Japanese yen held between 81.06 yen per US dollar and JPY81.63 and ended US trade near JPY81.30.

Benchmark crude oil prices rose on Wednesday as investors took their cue from stronger global equities markets. But soft economic figures served to restrain oil prices together with data showing a larger than expected lift in US crude inventories in the latest week. US Nymex crude rose by US57c or 0.6pct to US$104.12 a barrel. And London Brent crude rose by US96c to US$119.12 a barrel.

Base metal prices posted modest gains on the London Metals Exchange on Wednesday as traders balanced positive earnings results with soft economic data. Metals rose between 0.3-1.2pct but aluminium lost 0.6pct. And the gold price fell modestly in a volatile session with traders weighing up a raft of economic and corporate news. The June Comex gold futures price fell by US$1.50 or 0.1pct to US$1,642.30 an ounce.

Ahead: In Australia, no major economic or corporate news is expected. In the US weekly jobless claims data is released together with pending home sales figures and the Kansas City Fed manufacturing index.