US retail sales rose by 0.8pct in November - marking the fifth straight month of gains and ahead of expectations. Sales excluding autos surged by 1.2pct -the largest gain since March. Sales were strong in clothing, leisure, and department stores. The FOMC minutes described the US economic recovery as ´´continuing, though at a rate that has been insufficient to bring down unemployment´´. The US Fed reaffirmed its commitment to purchase $600 billion in bonds to stimulate the economy.

US business inventories rose by 0.7pct to $1.42 trillion in October - the highest level since February 2009. Business sales increased by 1.4pct to $1.12 trillion in October. The inventory to sales ratio rose modestly from 1.27 months to 1.28 months. US producer prices rose by a higher than expected 0.8pct in November. Core producer prices rose by a much more sedate 0.3pct.

European shares rose for the seventh straight day on Tuesday, though volumes were light. Energy stocks led the gains with BP rising by 3.2pct on speculation the Royal Dutch Shell was mulling a bid for the oil producer. The FTSEurofirst index rose by 0.3pct, with the UK FTSE higher by 0.5pct while the German Dax was largely unchanged.

US sharemarkets rallied on Tuesday. Investors were encouraged by strong US retail sales data.
Healthcare stocks also received a boost on broker upgrades. At the close of trade, the Dow Jones was higher by 48pts or 0.4pct with the S&P 500 up 0.1pct and the Nasdaq higher by 3pts or 0.1pct.

US treasuries extended early losses on Tuesday (yields higher) following the release of the Federal Reserve´s policy statement. US 2yr yields rose by 4pts to 0.63pct and US 10yr yields gained 18pts to 3.45pct.

The US dollar recovered some ground against major currencies after early losses on Tuesday. The Euro fell from highs near US$1.3485 to US$1.3365, ending US trade near US$1.3380. The Aussie dollar lifted from lows near US99.45c to US100.10c, and was near US99.85c in late US trade. And the Japanese yen eased from around 82.85 yen per US dollar to near JPY83.75, and was around JPY83.70 in late US trade.

US crude oil prices gave back early gains on Tuesday. The release of the FOMC, suggested that the US Fed was still worried about the pace of the recovery and had a dampening effect on oil prices. The Nymex crude oil contract fell by US33c or 0.4pct to US$88.28 a barrel.

Base metal prices were mixed on the London Metal Exchange. Aluminium and lead record healthy gains while Copper eased in late trade. The gold price rose on Tuesday with Comex gold futures up by US$6.30 an ounce to US$1,404.30.

Ahead: In Australia, consumer sentiment and new motor vehicle sales are released. In the US, data on consumer prices, industrial production and capacity utilisation are released.

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