New claims for unemployment insurance in the US fell by 24,000 to 435,000 in the latest week - below expectations of 450,000. The four-week average of claims is at 26-month lows.

The US government has posted a budget deficit of US$140 billion in October, below expectations for a shortfall near US$150bn, and below the US$176bn deficit in October last year. And the US trade gap narrowed to US$44bn in September with exports at 25-month highs.

China´s central bank has lifted the reserve requirement ratio of deposit taking institutions by 50 basis points, effective November 16.

European shares eased from two-year highs on Wednesday. Concerns about Euro-zone debt, profit-taking and an emergency cash injection for a Brazilian Bank were all cited as factors weighing on share prices. The FTSEurofirst index fell 0.7pct from two-year highs, while both the UK FTSE and German Dax fell by 1.0pct.

US sharemarkets rose on Wednesday with energy stocks leading the way. Shares in Chevron were up 1.7pct with Exxon Mobil up 0.6pct in response to a higher oil price. In the tech space, share in Research in Motion, makers of the Blackberry, jumped 6.4pct. At the close, the Dow Jones was up 10pts or 0.1pct with the S&P 500 up 0.4pct and the Nasdaq was higher by almost 16pts or 0.6pct.

US longer-term treasuries rose slightly on Wednesday (yields lower) with traders highlighting good economic data and weak demand for a US$16bn auction of 30-year bonds. US 2yr yields were down 2pts to 0.431pct and US 10yr yields fell 1pt to 2.657pct. US10-year bond yields have risen 17pts in the past three days.

Major currencies traded with little direction against the US dollar in European and US trade on Wednesday. The Euro held between US$1.3675 and US$1.3825, heading into the US close near US$1.3780. The Aussie dollar held between US99.80c to US$1.0070, nearing the US close at US$1.0060. And the Japanese yen is currently around 82.30 yen per US dollar after trading from JPY81.60 to JPY82.80.

US crude oil prices rose to new two-year highs on Wednesday in response to data showing a larger than expected drop in US stockpiles in the latest week. The Nymex crude oil contract rose by US$1.09 or 1.3pct to US$87.81 a barrel.

Base metal prices eased modestly on the London Metal Exchange on Wednesday as investors booked profits. Metals fell between 0.9-2.1pct with zinc faring worst. And the gold price eased from record highs with Comex gold futures down US$10.80 an ounce to US$1,399.30.

Ahead: In Australia, monthly labour force data is released. In China, monthly economic data is released. In the US no major economic data is scheduled.

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