US durable goods orders rose by 4.0pct in July, well ahead of forecasts for 2.0pct gain. Excluding transport, orders were up for the third straight month, rising by 0.7pct. And US home prices rose by 0.9pct in June after a 0.4pct lift in May according to the Federal Housing Finance Agency.

European shares rallied for a third straight session on Wednesday with stronger-than-expected US economic data providing comfort for investors. And mining shares were higher following a strong profit result from BHP Billiton. Shares in both BHP Billiton and Rio Tinto rose in London trade by 2.3pct. The FTSEurofirst index rose by 1.4pct, the German Dax lifted 2.7pct and the UK FTSE rallied by 1.5pct.

US sharemarkets posted strong gains on Wednesday. Economic data was stronger-than-expected and shares in Bank of America rallied 11pct after influential analysts rejected suggestions that the bank would need to raise capital. The Dow Jones rose by 144pts or 1.3pc with the S&P 500 up by 1.3pct and the Nasdaq rose 21.6pts or 0.9pct.

US long-term treasury prices fell sharply (yields higher) on Wednesday. Economic data was stronger than expected and equities rallied, prompting traders to book profits on recent gains by safe-haven assets such as government bonds and precious metals. There was good demand for a US$35 billion auction of five-year notes. US 2yr yields were up 1pt at 0.235pct and US 10yr yields rose 14pts to 2.298pct.

The US dollar drifted higher against the Euro and commodity currencies on Wednesday and rose against the Japanese yen. The Euro held between levels near US$1.4390 to US$1.4480, ending the US session at US$1.4415. The Aussie dollar held between US104.50c to US105.20c, ending US trade near US104.65c. And the Japanese yen eased from 76.45 yen per US dollar to JPY77.05, ending US trade near JPY77.00.

Global crude oil prices were mixed on Wednesday. Traders were eyeing the situation in Libya and tracking the progress of Hurricane Irene towards the US east coast which has strengthened to category 3. US Nymex crude oil fell by US28c or 0.3pct to US$85.16 a barrel but London Brent crude rose by US84c to US$110.15 a barrel.

Base metal prices were mixed on the London Metal Exchange on Wednesday as traders positioned for the Federal Reserve annual conference starting on Thursday. Gains or losses weren´t greater than 0.8pct with three metals up, and three down. But the gold price fell sharply again - the biggest fall since 2008 - as traders booked profits. The December Comex gold price was down by US$104.00 an ounce or 5.6pct to US$1,757.30.

Ahead: In Australia, IAG, Woolworths, Toll Holdings, Virgin Blue and AGL are amongst those releasing profit results. In the US, data on weekly claims for unemployment insurance are released together with the Kansas City Fed index.