US wholesale inventories fell by 0.2pct in November - the first fall in 11 months. Economists had tipped a 1pct gain. At the same time wholesale sales rose by 1.9pct, ahead of forecasts for a 1.5pct rise. Both results provided further encouragement about the economic recovery process. And chain store sales in the latest week were up 2.8pct on a year ago.

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European shares rose on Tuesday after investors were comforted by the latest news on Portugal. Ahead of the debt auction on Wednesday, the Portuguese Prime Minister said that the country had no plans to seek bail-out assistance, noting ´´excellent´´ budget results for 2010. Investors were also optimistic about the coming US earnings season. The FTSEurofirst index rose by 1.2pct, with the UK FTSE higher by 1.0pct while the German Dax rose by 1.2pct.

US sharemarkets rose in response to good corporate news. Shares in homebuilder Lennar rose by 7.1pct after posting a better-than-expected fourth-quarter profit result. And shares in retail store chain Sears rose by 6.8pct after the company lifted its profit outlook. At the close of trade, the Dow Jones index was higher by 34pts or 0.3pct with the S&P 500 up 0.4pct while the Nasdaq was up by 9pts or 0.3pct.

US treasuries fell on Tuesday (yields higher) as investors prepared for auctions of 10-year and 30-year later in the week. But losses were trimmed following a solid US$32 billion auction of 3-year notes. US 2yr yields rose by 2pts to 0.593pct and US 10yr yields rose by 5pts to 3.34pct.

Major currencies were largely directionless against the US dollar over the European and US sessions. The Euro held between US$1.2905 and US$1.2990, heading into the US close near US$1.2980. The Aussie dollar traded between US98.15c to US98.85c, and was near US98.75c in late US trade. And the Japanese yen eased from near 82.90 yen per US dollar to JPY83.50, but firmed to JPY83.20 in late US trade.

US crude oil prices rose on Tuesday in response to supply concerns. The Trans Alaska Pipeline remained closed on Tuesday and is expected to restart on Saturday. And Norway´s Statoil said its Snorre and Vigdis fields in the North Sea were shut on Tuesday in response to a gas leak. The Nymex crude oil contract rose by US$1.86 or 2.1pct to US$91.11 a barrel. Brent crude rose by US$1.90 or 2.0pct to US$97.60 a barrel.

Base metal prices rose on the London Metal Exchange on Tuesday. While the lead price was largely flat, nickel was up 3.5pct and copper rose 2.1pct as investors again embraced growth-dependent assets such as equities and commodities. And the gold price rose in line with other commodities with the Comex gold futures price higher by US$10.20 an ounce to US$1,384.30.

Ahead: In Australia, housing finance, job vacancies, credit card lending and overseas arrivals/departures figures are released. In the US, data on export and import prices is released.

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