US consumer prices rose by 0.5pct in February - marking the largest monthly increase in 18 months. In the 12 months to February consumer prices were up 2.1pct. Gasoline prices was the key driver rising by 4.7pct. Core consumer prices rose by a much more sedate 0.2pct in February and was up by 1.1pct over the year.

US initial jobless claims fell by 16,000 to 385,000 in the week to March 12. The US Conference Board Index of leading economic indicators rose by 0.8pct in February. US industrial production fell by 0.1pct in February, against forecasts for a 0.6pct increase. The Philadelphia Fed business conditions index rose from 35.9 to 43.4 in March - marking the highest reading in 27 years.

European shares rallied from three-month lows on Thursday as investors looked for cheaply priced stock. The insurance stocks topped the gains. The FTSEurofirst index rose by 1.8pct, the German Dax gained 2.2pct and the UK FTSE rose by 1.8pct.

US sharemarkets rallied on Thursday after three sessions of falls. The upbeat economic data supported investor sentiment, while commentary from Japanese authorities suggested that radiation levels at the Fukushima power plant had stabilised. The VIX fell 9pct. The Dow Jones index rose by 161pts or 1.4pct, the S&P 500 rallied 1.3pct and the Nasdaq gained 19pts or 0.7pct.

US treasuries fell on Thursday (yields higher). The upbeat economic data and modestly higher than expected core inflation result prompted traders to lock in profits after the recent run of gains. US 2yr yields rose 6pts to 0.59pct and US 10yr yields rose 10pts to 3.25pct.

The greenback eased against major currencies but pared early losses against the Yen on speculation that the Bank of Japan may intervene. The Euro rallied from lows near US$1.3915 to highs near US$1.4045 and headed into the US close near US$1.4020. The Aussie dollar rose from lows around US97.90c to US98.70c, and headed into the US close near US98.05c. The Japanese yen lifted from 79.40 yen per US dollar to around JPY78.35, ending US trade near JPY78.95.

US crude oil prices rallied on Thursday as traders once again focused on the supply concerns given the ongoing unrest in the Middle East. The Nymex crude oil contract rose by US$3.44 to US$101.42 a barrel. And the London Brent crude price rose by US$4.30 to US$114.90 a barrel.

Base metal prices recorded healthy gains on the London Metal Exchange on Thursday as Chinese buying demand picked up following the recent price falls. Nickel jumped 3.9pct while copper gained 3.3pct. The gold price rallied in line with other commodities on US dollar weakness. Comex gold futures gained US$8.10 an ounce to US$1,404.10.

Ahead: In Australia and the US there is no major economic data releases.