US ICSC comparable chain store sales rose 4.6pct in August compared with a year earlier. Wholesale and luxury retailers recorded the bulk of the growth. US ISM-Manufacturing fell from 50.9 to 50.6 in July. The result was better than expectations with analyst expecting a mild contraction. Across the sub indices, new orders remain below 50 while the employment gauge slipped to the lowest level in nine months.

US construction spending fell by 1.3pct to an annual rate of $789.5 billion in July. The weakness was driven by a sharp drop in public sector activity. However the June result was revised higher to 1.6pct from a previously reported 0.2pct. US initial jobless claims fell by 8,000 to 409,000 last week.

European shares rose again on Thursday, however the gains were led by the defensive sectors of the economy. Telco´s and pharmaceutical stocks with high dividend yields led the gains. Deutsche Telecom gained 2.2pct while GlaxoSmithKline rose 1.4pct. Shares in Rio Tinto fell 0.9pct in London trade. The FTSEurofirst index rose 0.7pct, with the German Dax down 0.9pct and the UK FTSE higher by 0.5pct.

US sharemarkets fell on Thursday ahead of the key non-farm payrolls data. The weakness in the ISM employment gauge raised concerns about the strength of the labour market. Financial stocks were the biggest losers, selling of sharply in afternoon trade after the US Fed ordered Goldman Sachs to review foreclosures. Goldman Sach fell 3.5pct. The Dow fell almost 120pts or 1pct. The S&P 500 closed 1.2pct lower and the Nasdaq lost 33pts or 1.3pct.

US treasury prices rose on Thursday (yields lower) as traders waited on payrolls figures released tonight. US 2yr yields fell by 2pts to 0.184pct and US 10yr yields fell 10pts to 2.13pct.

The US dollar rallied against the Euro after data showed a contraction in manufacturing in most euro zone countries. The Euro fell from highs near US$1.4370 to lows near US$1.4230 before ending US trade near US$1.4270. The Aussie dollar rose from lows around US106.80c to US107.65c, ending US trade near US107.35c. And the Japanese yen held between 77.15 yen per US dollar and JPY76.70, ending US trade at JPY76.80.

US crude oil prices rose modestly as the brewing storm in the Gulf of Mexico shut nearly 6pct of oil output in the region. In addition about 2.4pct of natural gas output was shut. Nymex crude oil rose by US12c or 0.1pct to US$88.93 a barrel and London Brent crude fell by US56c to US$114.29 a barrel.

Base metal prices fell on the London Metal Exchange on Thursday. The weakness was in response to a drop in Chinese export orders and the contraction European manufacturing activity. Metals fell between 0.6-2.3pct. And the gold price was weaker in line with other commodities. Comex December gold fell US$2.60 an ounce or 0.1pct to US$1,829.10.

Ahead: In Australia, tourist arrivals figures are released. In the US, non-farm payrolls are released.