US wholesale inventories rose by 1.5pct in September ahead of expectations for a 0.7pct rise. The inventory to sales ratio (a measure of how long it would take to clear shelves at the current sale pace) rose to 1.18 months - the highest reading in 10 months.

US ICSC chain store sales rose 1.3pct last week. The NFIB small business index rose by 2.7 points to 91.7 - the third straight monthly rise. Over the next three months 8pct of small business owners planned to increase employment, while 13pct planned to reduce their workforce.

European shares closed at their highest level in more than two years on Tuesday. Upbeat corporate earning supported investor sentiment. Barclays adding 4pct after a lift in underlying profit. Mining stocks were in favour as commodity prices received a boost. The FTSEurofirst index rose 0.6pct, while the UK FTSE gained 0.4pct and the German Dax rose 0.6pct.

US sharemarkets fell for the second straight session on Tuesday as investor locked in profits. The S&P financial index led the declines down 1.5pct. Commodity stocks gave back earlier gains as the US dollar strengthened. Yahoo shares rose after Alibaba group was approached by private equity firm KKR to make a bid to buy Yahoo. At the close of trade, the Dow Jones was lower by 60pts or 0.5pct with the S&P 500 down 0.8pct and the Nasdaq down 17pts or 0.7pct.

US treasuries fell (yields higher) on Tuesday. The $24billion auction of 10yr notes found strong demand at a yield of 2.636pct - lower than traders had expected. US 30yr bond yields rose above its 200-day moving average of 4.20pct for the first time since May. US 2yr yields rose by 4pts to 0.447pct and US 10yr yields rose by 11pts to 2.663pct.

The US dollar rallied against the Euro for a third straight session as budget problems in Ireland and euro zone debt drove investors to the safety of the greenback. The Euro fell from highs near US$1.3970 to US$1.3755, heading into the US close near US$1.3775. The Aussie dollar fell from near US$1.0170 to US$1.0002 nearing the US close at US$1.0035. And the Japanese yen is currently around 81.80 yen per US dollar after trading from JPY80.55 to JPY81.95.

US crude oil prices eased from two-year highs on Tuesday, following the rise in the US dollar. The Nymex crude oil contract fell by US34c or 0.4pct to US$86.72.

Base metal prices were sharply higher on the London Metal Exchange on Tuesday. Copper hit a 27-month spurred by falling inventories and supply concerns. Copper rose 2.3pct. Other metals rose between 1.6-4.2pct. And the gold price rose to fresh record highs. Comex gold futures closed up US$6.80 an ounce to US$1,410.00.

Ahead: In Australia, consumer sentiment and housing finance data are released. In the US trade data is released.

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