US jobless claims (new claims for unemployment insurance) fell by 1,000 to 400,000 in the latest week. Economists had tipped a reading around 405,000. The four-week average has fallen to the lowest levels in over four months.

The European Central Bank and Bank of England both left policy rates unchanged at meetings held on Thursday. ECB President Trichet commented that growth was ´´slowing down´´ at a global level. The ECB also resumed buying government bonds from the market and offered a new round of funding to commercial banks. The ECB had no plans to buy bonds from Italy and Spain despite yields rising to 14-year highs.

European shares tumbled for a fifth straight day to fresh 11-month lows on continued worries about the European debt crisis. The European Central Bank bought Portuguese and Irish bonds on Thursday while Italian 10-year bond yields traded at a record premium above German debt. The FTSEurofirst index fell by 3.3pct with the German Dax and UK FTSE both lower by 3.4pct.

US sharemarkets recorded their biggest one-day declines in over 2-1/2 years. While there wasn´t one single factor driving the falls, investors are fearful that the European debt crisis could prompt another global financial crisis and US recession. The Dow Jones fell by 512pts or 4.3pct with the S&P 500 down by 4.7pct while the Nasdaq lost 136.7pts or 5.1pct.

US treasuries soared on Thursday (yields lower) as investors dumped equities and took profits in the commodity markets in preference for US government bonds. US 2yr yields fell by 8pts to 0.26pct and US 10yr yields fell by 21pts to 2.418pct.

The Euro and commodity currencies slumped against the US dollar over European and US sessions as investors flocked to safe-haven assets like the greenback, the Swiss franc and Japanese yen. The Euro fell from highs near US$1.4275 to US$1.4100, ending the US session near the day´s lows. The Aussie dollar fell from highs near US106.85c to US104.55c, ending US trade near the day´s lows. And the Japanese yen lifted from 80.25 yen per US dollar to JPY78.70, ending US trade near JPY79.10.

Benchmark crude oil prices recorded their biggest daily falls in two months on concern that the European debt crisis would crimp global growth and thus demand for oil. Nymex crude oil fell by US$5.30 or 5.8pct to US$86.63 a barrel and London Brent crude fell by US$5.98 or 5.3pct to US$107.25 a barrel.

Base metal prices fell sharply for the second straight day on the London Metal Exchange as investors fretted about the health of the global economy. Metals fell between 0.6-3.0pct with nickel faring best and tin faring the worst. And the gold price also fell as investors chose to take profits after recent gains. Comex December gold fell by US$7.30 an ounce or 0.4pct to US$1,659.00.

Ahead: In Australia, the Reserve Bank releases the Statement on Monetary Policy. In the US, non-farm payrolls (employment) data is issued.