MORNING REPORT
(7am AEDT)

European leaders plan to leverage up the bailout fund (EFSF) ´´several fold´´ to a mooted 1 trillion euros with finance ministers to decide details in November. The EFSF will have the flexibility to deploy two models - risk insurance and special purpose vehicle - simultaneously. Italy has promised to deliver an economic development plan by November 15.

US new home sales soared by 5.7pct to a 313,000 annual rate - well above forecasts centred on a result near 300,000. The supply of new homes fell to 6.2 months - the lowest since April 2010. The median sale price was down 10.4pct on a year ago.

US durable goods orders fell by 0.8pct in September, in line with forecasts. Non-defence capital goods orders less aircraft (business investment) rose by 2.4pct - the biggest rise since March.

European shares were mixed on Wednesday as investors awaited a summit of European leaders to address the debt crisis. The FTSEurofirst index rose by 0.1pct with the German Dax lower by 0.5pct while the UK FTSE gained 0.5pct.

US sharemarkets rose on Wednesday as details started to emerge of decisions made at the Euro summit. The Dow Jones had been up in late trade by 185 points and closed higher by 162pts or 1.4pct with the S&P 500 up by 1.1pct and the Nasdaq gained 12pts or 0.5pct.

US treasuries fell on Wednesday (yields higher) as investors reversed some of the previous day´s gains on cautious optimism about the European debt summit. US 2yr yields rose by 4pts to 0.29pct and US 10yr yields lifted by 9pts to 2.20pct.

Major currencies gyrated against the greenback over US and European sessions . The Euro fell from highs near US$1.3965 to US$1.3805, but rebounded to end US trade near US$1.3910. The Aussie dollar also eased from highs around US104.20c to US103.20c, but rebounded to end US trade at US104.00c. And the Japanese yen eased from 75.80 yen to JPY76.25, ending US trade near the weakest levels.

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Global crude oil prices fell on Wednesday. Some investors were keen to book profits ahead of the European debt summit while US inventories were also higher-than-expected in the latest week. Nymex crude oil fell by US$2.97 or 3.2pct to US$90.20 a barrel and London Brent crude fell by US$2.01 to US$108.91 a barrel.

Base metal prices were mixed on Wednesday with copper up 2pct but tin down by 3.9pct and nickel lower by 3.1pct. The gold price rose again with the Comex December gold price up by US$23.10 an ounce to US$1,723.50.

Ahead: In Australia, NAB and Ten Network release their profit results. Sales results are expected from Woolworths and Harvey Norman. In the US, GDP (economic growth) data is released together with weekly unemployment claims.

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