US comparable chain store sales rose 3.1pct in December from a year earlier, according to the International Council of Shopping Centres. Luxury store sales recorded a significant 8.1pct rise from a year earlier.

US jobless claims rose by a higher than expected 18,000 to a seasonally adjusted 409,000. The four week average of unemployment claims - a better measure of underlying trends - fell to the lowest levels since July 2008.

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European shares climbed to their highest level in nearly 28 months on Thursday. However gains were muted by a drag on energy and mining stocks as commodity prices retreated. The FTSEurofirst index rose by 0.4pct, with the UK FTSE lower by 0.4pct and the German Dax was higher by 0.6pct.

US sharemarkets fell on Thursday as disappointing sales results from some retailers dampened investor sentiment. The post Christmas blizzard was largely to blame. Target shares fell 6.8pct. Investors also waited on the key payrolls numbers due on Friday night. Economists are forecasting a 175,000 gain in overall non-farm payrolls. At the close of trade, the Dow Jones was lower by almost 26pts or 0.2pct with the S&P 500 down 0.2pct and the Nasdaq was higher by 8pts or 0.3pct.

US treasuries rose on Thursday (yields lower) in response to the weaker economic data and a modest fall in equity markets. US 2yr yields fell by 4pts to 0.68pct and US 10yr yields fell by 6pts to 3.41pct.

The US dollar rallied against major currencies in particular against the Euro - touching five week highs. The Euro eased from highs near US$1.3160 to US$1.2995, and was trading near US$1.3015 in late US trade. The Aussie fell from highs near US99.95c, to lows near US99.40c and was trading near US99.45c in late US trade. And the Japanese yen traded between 82.90 yen per US dollar and JPY83.30 and was near JPY83.30 in late US trade.

US crude oil prices fell on Thursday as the rise in jobless claims and weak retail sales figures disappointed traders. The Nymex crude oil contract fell by US$1.92 or 2.1pct to US$88.38 a barrel. The Brent futures crude contract fell by US$1.20 to US$94.30. The gap between Brent and Nymex touched US$6.55 on Thursday - marking the biggest spread since May 2010.

Base metal prices were mostly weaker on the London Metal Exchange on Thursday, the exception being Aluminium, up 2.2pct and Lead, up just 0.1pct. Other metals lost between 0.4-1.0pct with Copper recording the biggest drop. The gold price eased again as the strengthening US dollar reduced the attractiveness of the safe haven investment. The Comex gold futures price closed down by US$2.00 an ounce to US$1,371.70.

Ahead: In Australia no economic data is released. In the US non-farm payrolls and consumer credit figures are released.

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