US private sector payrolls fell by 39,000 in September - against expectations for a rise of 24,000. However the August result was revised higher to a gain of 10,000. The ADP employment report suggested that the non-farm payrolls number is likely to be ´´pretty soft´´.

US mortgage applications (which includes refinancing) fell by 0.2pct in the past week - marking the fifth straight week of declines. However the MBA purchase index (an early indicator of home sales) rose 9.3pct -the highest level in five months. Borrowing costs on a 30-year fixed-rate mortgage averaged 4.25pct - the lowest level in records going back 20 years.

European shares rallied on Wednesday, with mining stocks leading the gains. The weakness in the US dollar supported the bid for commodities. Energy stocks also recorded strong gains as the oil price hit five month highs. The FTSEurofirst index rose by 0.4pct, with the UK FTSE up by 0.8pct and the German Dax was higher by 0.9pct.

US sharemarkets were mixed on Wednesday, as investors waited on the key payrolls data released on Friday. The weak ADP employment report added to speculation of a further round of Fed stimulus. Technology stocks led the declines on broker downgrades. The Dow Jones closed up 23pts or 0.2pct with the S&P 500 down 0.1pct and the Nasdaq lower by 19pts or 0.8pct.

US short-term treasuries rallied on Wednesday (yields lower) as speculation mounted that the Federal Reserve will add further stimulus to the economy. US 2yr yields eased by 3pst to 0.39pct while US 10yr yields fell by 8pts to near 2.39pct.

The Euro and commodity currencies recorded strong gains against the greenback on Wednesday. The Euro rose from lows near US$1.3805 to eight month highs near US$1.3940, ending US trade near US$1.3930. The Aussie dollar lifted from lows near US97.05c to US97.90c, closing US trade near US97.70c. And the Japanese yen lifted from 83.15 yen per US dollar to near JPY82.75, ending US trade around JPY82.90.

US crude oil prices rose for the fifth time in six sessions on Wednesday, rising by 0.5pct. A slide in US gasoline and distillate inventories offset a build in crude oil stockpiles. The Nymex crude oil contract rose by US41c or 0.5pct to US$83.23 and traded as high as US$84.09 a barrel. London Brent crude rose by US30c to US$85.14 a barrel.

Base metal prices posted firm gains on the London Metal Exchange on Wednesday. The copper price hit the highest level in more than two years rising by 1pct. And the gold price hit fresh record highs, gaining strength with other commodities in response to a weaker greenback. The Comex gold futures price rose by US$7.40 an ounce to US$1,347.70, hitting highs of US$1,351.

Ahead: In Australia, employment data is released. In the US the consumer credit is released.