US jobless claims fell by 21,000 to 434,000 - a three month low. Those people remaining on unemployment benefits after drawing an initial week of aid fell by 122,000 to 4.36 million - the lowest reading since November 2008. The Kansas city manufacturing index eased from a reading of 14 to 10 in October. The sub indices were mixed, with shipments weaker while new orders ticked higher.

European shares rallied on Thursday on upbeat earnings. Energy stocks were amongst the biggest gainers following Royal Dutch Shell reporting results ahead of analyst forecasts. Mining stocks also received a boost with BHP gaining 2.7pct. The FTSEurofirst index rose by 0.5pct, with the UK FTSE up by 0.6pct while the German Dax higher 0.4pct.

US sharemarkets ended mixed on Thursday. Earnings results were largely disregarded with investors remaining cautious ahead of next week's FOMC meeting and mid-term elections. A Reuters poll found that most economists were expecting the Fed to buy between $80-$100 billion in assets per month, with the total size of the program varying between $500 billion and $1.5 trillion. The Dow Jones closed lower by 12pts or 0.2pct with the S&P 500 up 0.1pct while the Nasdaq rose by 4pts or 0.2pct.

US treasuries rose on Thursday (yields lower) as traders bet on an aggressive round of stimulus by the Federal Reserve next week. The $29 billion auction of 7-year notes found strong demand. US 2yr yields fell by 6pts to 0.37pct, and US 10yr yields lost 6pts to 2.66pct.

The US dollar fell against the Euro and commodity currencies in European and US trade as investors reassessed how much stimulus the Federal Reserve was likely to provide. The Euro rallied from US$1.3795 to US$1.3940, ending US trade near US$1.3930. The Aussie dollar rose from lows near US97.45c to US98.20c, before ending US trade near US97.85c. And the Japanese yen held between 81.60 yen per US dollar to JPY80.85, ending US trade near JPY81.05.

US crude oil prices rose on Thursday supported by a weaker US dollar and an improvement in US jobless claims. The Nymex crude oil contract rose by US70c to US$82.64 a barrel.

Base metal prices were mixed on the London Metal Exchange on Thursday. The weakness in the greenback supported metal prices however gains were capped ahead of the Federal Reserve meeting. Nickel gained 1.3pct while Copper rose 0.5pct. And the gold price rallied in line with other commodities with the Comex gold futures price up by US$19.50 an ounce to US$1,342.10.

Ahead: In Australia, the RP Data - Rismark house price index and private sector credit are released. In the US, September quarter GDP and the University of Michigan Confidence index is released.

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