US producer prices rose by 1.6pct in February - marking the largest monthly increase in 18 months. In the 12 months to February producer prices were up 5.6pct. Energy price surged by 3.3pct in February. Food prices jumped 3.9pct - the biggest increase since 1974. Core producer prices rose by a much more sedate 0.2pct in January and was up by 1.8pct over the year.

US housing starts fell by 22.5pct in February, while building permits fell by 8.2pct to 517,000 units - the lowest level in records going back to 1960.

European shares fell for the sixth straight session as worries about the nuclear crisis in Japan and unrest in the Middle East intensified. The banking sector was among the worst performers after Moody´s downgraded Portugal´s sovereign debt rating overnight. The FTSEurofirst index lost 1.6pct, the German Dax fell by 2pct and the UK FTSE eased by 1.7pct.

US sharemarkets slumped on Wednesday as investors continued to fret about the nuclear situation in Japan. The market slide worsened after the Chief of the International Atomic Energy Agency said that the damage at the nuclear reactor was "very serious" although the reactor core seemed intact. The VIX jumped 18pct. The Dow Jones index fell by 242pts or 2.0pct, the S&P 500 lost 2.0pct and the Nasdaq gave back 51pts or 1.9pct.

US treasuries rallied on Wednesday as the threat of a escalating nuclear crisis saw investors embraced safe-haven government bonds. US 2yr yields fell 6pts to 0.55pct and US 10yr yields lost 10pts to 3.21pct.

The greenback rallied against the Euro as the demand for safe haven currencies gained traction. The Euro fell from highs near US$1.3995 to lows near US$1.3865 and headed into the US close near US$1.3890. The Aussie dollar fell from highs near US99.60c to US97.70c, and headed into the US close near US98.25c. The Japanese yen lifted from 80.95 yen per US dollar to around JPY79.70, ending US trade near JPY79.80.

US crude oil prices rose on Wednesday in a volatile session The unrest in the Middle East was offset by the concerns about Japan. The EIA reported that crude oil inventories rose by 1.7 million barrels last week - modestly below expectations of a 2.1 million barrel build. The Nymex crude oil contract rose by US80c to US$97.98 a barrel. And the London Brent crude price rose by US$2.01 to US$110.62 a barrel.

Base metal prices were mostly higher on the London Metal Exchange on Wednesday as traders looked for bargains given the recent falls. Lead jumped 2.9pct while copper gained 1.6pct. The gold price rallied in line with other commodities. Comex gold futures gained US$3.10 an ounce to US$1,392.80.

Ahead: In Australia, detailed labour market figures are released. In the US the philadelphia Fed index, industrial production and consumer prices are released.

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