From Craig James, Commsec Chief Economist

MORNING REPORT (8.00am AEDT) -- US jobless claims fell 23,000 to 381,000 in the past week - a nine month low. US wholesale inventories rose 1.6pct in October after rising by a downwardly revised 0.3pct in September. The October result marked the largest rise since May 2011.

As expected, the ECB cut its refi rate by another 25bps to 1.0pct. However the decision was not unanimous. ECB president Draghi also announced another set of ECB non-standard measures to ease liquidity conditions for bank and attempt to prevent a credit crunch in the wider economy. The ECB published its updated GDP growth forecasts for 2012, with growth lowered from 1.3pct to 0.3pct.

European shares fell to a one-week low on Thursday after the ECB gave no indication the bank would aggressively increase its bond-buying programme. Banking stocks were the worst performers with the STOXX Europe 600 Banks index down 3.1pct. Investors were also worried France and Germany´s plans to overhaul the euro zone´s fiscal rules would not be backed at the crucial EU summit this weekend. The FTSEurofirst index fell by 1.4pct while the UK FTSE was down 1.1pct and the German Dax lost 2pct.

US shares fell on Thursday after the ECB tempered optimism ahead of the EU summit this weekend. Financial stocks recorded the biggest declines. At the close of trade, the Dow Jones was lower by 198 points or 1.6pct. The S&P 500 fell by 2.1pct, and the Nasdaq was lower by 2pct.

US treasuries rallied on Thursday (yields lower) as investors shifted to safe-haven assets as concerns grew that European leaders may fail to reach a deal at the upcoming summit. US 2yr yields fell 2pts to 0.222pct and US 10yr yields fell by 7pts to 1.972pct.

The Euro and commodity currencies fell against the greenback in overnight trade. The Euro fell from highs near US$1.3455 to around US$1.3290 and was near US$1.3350 in late US trade. The Aussie dollar fell from highs around US103.70c to US101.50c, and was near US101.70c in late US trade. And the Japanese yen held between 77.15 yen per US dollar and JPY77.80, and was near JPY77.65 in late US trade.

World crude oil prices fell for the second straight session on Thursday following the decision by the ECB to not ramp up its bond-buying programme. Nymex crude oil fell by US$2.15 to US$98.34 a barrel and London Brent crude fell by US$1.42 to US$108.11 a barrel.

Base metal prices were mostly lower on the London Metals Exchange on Thursday. Traders remained cautious ahead of the Chinese economic data out later today and the EU summit this weekend. Most metals fell between 0.5-2.2pct with the exception of Nickel up 1.4pct. And the gold price fell with the Comex February gold price down by US$31.40 an ounce or 1.8pct to US$1,713.40.

Ahead: In Australia, no economic data is released. In the US, the consumer confidence is released. Chinese economic data is set for release today.