The final US consumer sentiment reading for November rose from 67.7 to 71.6. The surveys one-year inflation expectations measure also rose, hitting 3.0pct. US October new home sales fell by 8.1pct to a seven-year low. October´s weak sales pushed up the supply of new homes on the market to 8.6 months.

US jobless claims fell by 34,000 to 407,000 in the last week - the lowest reading in five months. US October durable goods orders fell by 3.3pct after surging by a revised 5 per cent in the prior month. Excluding transportation orders dropped 2.7pct.

US personal income rose 0.5pct while personal spending rose 0.4pct in October. The Federal Reserve´s preferred measure of consumer inflation, the core PCE price index rose by 0.9pct over the past year - the smallest increase on record. The Economic Cycle Research Institute´s weekly leading index (a measure of future US economic growth) rose to 126.4 - the highest reading in six months.

European shares bounced of six-week lows on Wednesday. German business sentiment rose to its strongest level since 1991, supporting the bid for equities. The FTSEurofirst index rose 1pct, the UK FTSE gained 1.4pct and the German Dax rose1.8pct.

US sharemarkets rallied on Wednesday as the pickup in consumer spending and improving employment indicated an upbeat US economic recovery. The CBOE volatility index fell 6pct. The S&P consumer discretionary index gained 2pct. At the close of trade, the Dow Jones was higher by 151pts, the S&P 500 gained 1.9pct and the Nasdaq rose 48pts or 1.9pct.

US treasuries fell (yields higher) as investors switched into equities. Adding to the weakness was the lacklustre auction for $29b billion in 7yr notes. US 2yr yields rose 6pts to 0.52pct and US 10yr yields rose 13pts to 2.91pct.

The Euro continued to struggle against the greenback hitting fresh two-month lows. The Euro fell from highs near US$1.3415 to US$1.3285, heading into the US close near US$1.3330. The Aussie dollar rallied from lows near US97.40c to US98.45c, heading into the US close near US98.15c. And the Japanese yen is currently around 83.60 yen per US dollar after trading from JPY82.95 to JPY83.70.

US crude oil prices rose on the better than expected US economic data. An unexpected 1.03 million barrel rise in crude stocks did not dampen sentiment. The Nymex crude oil contract rose by US$2.61 to US$83.86 a barrel.

Base metal prices rallied on Wednesday supported by the better than expected economic data. Nickel outperformed rising 4.2pct, while other metals gained between 0.2pct-1.8pct. And the gold price eased on Wednesday, with Comex gold futures down US$4.60 an ounce to US$1,373.

Ahead: In Australia, September quarter Capex data is released. In the US no economic data is expected, with markets closed due to the Thanksgiving holiday.

Newsletter: Subscribe to receive this report daily