US jobless claims rose by a larger than expected 20,000 to a seasonally adjusted 457,000 in the last week. The number of people remaining on unemployment benefits after drawing a initial week of aid rose by 198,000 to 3.98 million. US comparable chain store sales rose by 1.6pct in October compared with a year earlier. The ICSC has upgrade forecasts for chain store sales to rise from 3pct to 4pct in November.

US business productivity rose at a stronger than expected 1.9pct annual rate in the September quarter. The stronger than expected productivity reading should help support corporate profits and employment going forward. Unit labour costs (a barometer of inflation pressures) fell at a 0.1pct rate in the third quarter after rising by 1.3pct in the second quarter.

European shares rallied to seven-month highs on Thursday, as investor appetite improved following the Federal Reserve´s decision on Wednesday to stimulate the US economy. Mining stocks received a strong boost with BHP rising 6.6pct and Xstrata up 7pct. The FTSEurofirst index rose by 1.6pct, with the UK FTSE gained 1.9pct and the German Dax higher by 1.7pct.

US sharemarkets rallied sharply on Thursday with the S&P500 hitting its highest level in more than two years. Bank stocks climbed in late trade after speculation that the Fed may soon allow some stronger banks to increase their dividend. Mining stocks were well supported given the improvement in risk appetite. The Dow Jones closed higher by 220pts or 2.0pct with the S&P 500 up 1.9pct and the Nasdaq up by 37pts or 1.5pct.

US treasuries rose (yields lower) on Thursday with investors betting that yields will continue to fall as the Federal Reserve begins a new program to buy $600 million more in treasuries by the middle of next year. US 2yr yields fell 1pt to 0.332pct and US 10yr yields fell 8pts to 2.487pct.

The US dollar fell to a nine-month low against the Euro and hit 28-year lows against the Australian dollar as the Fed´s commitment to purchase treasuries drove yields lower. The Euro rose from US$1.4115 to US$1.4280. The Aussie dollar rose US$1.0040 to US$1.0160 closing US trade near its highs. And the Japanese yen is currently around 80.65 yen per US dollar after trading from JPY81.10 to JPY80.60.

US crude oil prices hit seven-month highs on Thursday as the weaker US dollar spurred risk appetite. The Nymex crude oil contract rose by US$1.80 or 2.1pct to US$86.49.

Base metal prices rallied on the London Metal Exchange on Thursday as the weaker US dollar and Fed stimulus supported the demand for commodities. And the Comex gold futures price rose by US$45.50 an ounce to US$1,383.10.

Ahead: In Australia, the Reserve Bank Monetary Policy Statement. In the US payrolls data, home sales, and consumer credit are released.

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