US industrial production fell by 0.2pct in September after rising by 0.2pct in August. Analysts had tipped a 0.2pct gain. Capacity use slipped from 74.8pct to 74.7pct. But the NAHB housing market sentiment index rose from +13 to +16 in October, above expectations. And net capital inflows to the US totalled US$38.9 billion in August while long-term capital inflow totalled US$128.7bn in the month.

Atlanta Federal Reserve President Dennis Lockhart is leaning in favour of more monetary stimulus: ´´I am leaning in favour of additional monetary stimulus while acknowledging the longer-term risks the policy may present.´´ Lockhart also indicated that the Fed is looking into mortgage foreclosure documentation problems at banks.

European shares rose to near six month highs on Monday with a solid earnings result from Citigroup boosting investor interest in financial stocks. Energy companies also rose as oil prices lifted. The FTSEurofirst index rose by 0.3pct with the UK FTSE up by 0.7pct and the German Dax up by 0.4pct.

US sharemarkets rose on Monday. Shares in Citigroup soared by over 5pct after its earnings result beat expectations. While only 10pct of S&P 500 companies have reported earnings, 84pct have beaten expectations. The Dow Jones rose by 81pts or 0.7pct with the S&P 500 up 0.7pct and the Nasdaq lifted by almost 12pts or 0.5pct.

US longer-term treasuries rose on Monday (yields lower) in a reversal of Friday´s moves as bargain hunters emerged. The Federal Reserve also bought medium-term notes to maintain liquidity in the system. The New York Fed bought US$6.26 billion of securities. US 2yr yields fell by 1pt to 0.36pct, and US 10yr yields fell by 6pts to 2.50pct.

Major currencies bottomed against the greenback in morning European trade and then moved sharply higher in US trade. The Euro rose from lows near US$1.3830 to almost US$1.4000, ending US trade near US$1.3990. The Aussie dollar lifted from lows around USUS98.00c to almost US99.45c, ending US trade at US99.35c. And the Japanese yen held in a tight range of 81.10 yen per US dollar to JPY81.35, ending US trade near JPY81.15.

US crude oil prices rebounded on Monday. Investors continue to fret about possible supply disruptions after strike action at a key French oil port moved into its 20th day. And the US dollar resumed its slide against major currencies. The Nymex crude oil contract rose by US$1.83 or 2.3pct to US$83.08 a barrel.

Base metal prices were generally slightly higher on the London Metal Exchange on Monday. While metals rose by up to 1.3pct, nickel bucked the trend, easing by 1.0pct. And the gold price also rose slightly with the Comex gold futures price up by US60c an ounce to US$1,372.60.

Ahead: In Australia, the Reserve Bank publishes minutes of the October Board meeting. In the US data on housing starts is released. The Bank of Canada hands down its rate decision.

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