US consumer prices rose by a smaller than expected 0.2pct in October after edging up by 0.1pct in September. The headline CPI rose 1.8pct over the year. Excluding food and energy costs, prices were flat for a third straight month. Core consumer prices rose 0.6pct on a year ago - the weakest reading on record.

US housing starts fell by 11.7pct to a 519,000 unit annual rate - the lowest reading since April 2009 and well below what economist´s projected. US building permits - a leading indicator of construction activity - rose by a smaller than expected 0.5pct in October after sliding by 4.2pct in September.

European shares bounced back on Wednesday as Ireland agreed to work with the EU and IMF to ensure that Irish banks are well capitalised. Supply concerns pushed up metal prices, supporting commodity stocks. The FTSEurofirst index gained 0.6pct, the UK FTSE rose 0.2pct and the German Dax rose 0.6pct.

US sharemarkets were mixed after trading in a tight range on Wednesday. Investors remained cautious as the market waited on further clarity surrounding Irish debt issues. Retail stocks received a boost after a bullish outlook statement from Target. The S&P retail index rose 0.7pct. The CBOE volatility gauge declined 2.7pct. At the close of trade, the Dow Jones was lower by 16pts, the S&P 500 flat and the Nasdaq higher by 6pts or 0.2pct.

US long-dated treasuries trimmed gains on Wednesday after Republican lawmakers released a letter to the Federal Reserve Chairman Ben Bernanke expressing their concerns over the $600 billion stimulus program. US 2yr yields fell 3pts to 0.48pct and US 10yr yields rose 1pts to 2.86pct.

The Euro rose from seven-week lows against the US dollar, following the benign US inflation data. The Euro rose from lows near US$1.3465 to US$1.3555, heading into the US close near US$1.3515. The Aussie dollar rose from lows near US97.25c to US98.35c, heading into the US close near US97.80c. And the Japanese yen is currently around 83.30 yen per US dollar after trading from JPY83.05 to JPY83.50.

US crude oil prices fell for a fourth straight session. Concerns persisted that China would raise interest rates to curb inflation and in turn ease demand for oil. Capping the losses was the 7.39 million drawdown in crude oil inventories. The Nymex crude oil contract fell US$1.90 to US$80.44 a barrel.

Base metal prices reversed the previous sessions losses on the London Metal Exchange on Wednesday. The exception was Zinc which fell 1.6pct. Copper gained 0.7pct, while other metals rose by 0.4pct-3.5pct. And the gold price lost ground for a second straight session, with Comex gold futures down US$1.50 an ounce to US$1,336.80.

Ahead: In Australia, the ABARE database of mining projects is released. In the Philadelphia Fed index and US leading indicators are released.

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