US existing home sales soared by 12.3 per cent to annual rate of 5.28 million far surpassing forecasts for a rise to 4.85 million. US jobless claims fell by 37,000 to 404,000 over the past week. The Philadelphia Fed Index eased from 20.8 to 19.3 in January. Underlying sub-components of the index like new orders and shipments remained healthy. The Conference Board´s leading index rose by 1.0 per cent in December.

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European markets

European shares fell for the second straight session. Mining stocks were among the causalities as investors worried that China will have to undertake further tightening to combat inflation. BHP Billiton lost 3.6pct and Rio Tinto gave back 3.2pct. The FTSEurofirst index fell by 1.1pct, with the UK FTSE lower by 1.8pct while the German Dax lost 0.8pct.

US markets

US sharemarkets were modestly weaker on Thursday as investors booked profits after the recent round of gains. Sectors that have led the recent rally were the hardest hit with the S&P materials index losing 1.5pct and the Philadelphia semiconductor index losing 1.5pct. Shares in Freeport McMoran Copper and Gold lost 4.4pct after it cut its sales forecast and said costs would rise. At the close of trade, the Dow Jones index was down almost 2pts with the S&P 500 down 0.1pct and the Nasdaq was lower by 21pts or 0.8pct.

US treasuries fell on Thursday (yields higher) following a weak bond auction. The $13 billion sale of 10yr TIPS was met with lacklustre demand. US 2yr yields rose 5pts to 0.63pct and US 10yr yields rose 10pts to 3.45pct.

The US dollar rallied against major currencies in overnight trade following the better than expected US economic data. The Euro hit early highs near US$1.3515 before falling to lows near US$1.3400 and was holding near US$1.3465 in late US trade. The Aussie dollar fell from highs around US99.65c to US98.35c, and was near US98.75c in late US trade. And the Japanese yen fell from 82.05 yen per US dollar to JPY83.05, and was near JPY83.00 in late US trade.

US crude oil prices fell for a third straight session on Thursday following the unexpected rise in weekly oil inventories. EIA data showed that US crude stockpiles rose by 2.62 million barrels against expectations for a 400,000 barrel drawdown. The rise in inventory was the first in seven weeks. The Nymex crude oil contract fell by U$2.00 to US$88.56 a barrel. And London Brent crude contract fell by US$1.40 to US$96.76 a barrel.

Base metals

Base metal prices fell on the London Metal Exchange on Thursday in response to concerns that China may look at further monetary policy tightening. The rise in the US dollar also dampened investor demand for commodities. Most metals fell between 1.0-3.2pct, however Nickel bucked the trend up by 0.4pct. And the gold price followed the oil price. The Comex gold futures price was lower by US$23.70 an ounce to US$1,346.50.

Ahead: In Australia, import and export data is released. In the US, no economic data is released.