MORNING REPORT- (7.00am AEST)

Existing home sales rose by a larger than expected 3.7pct in March. However the median home price fell 5.9pct in March. The inventory of existing homes for sales fell from 8.5 to 8.4 months worth.

European shares rose to a one-week closing high on Wednesday as strong earnings boosted auto and tech shares. Peugeot Citroen jumped 4.7pct after quarterly revenue beat forecasts. However Greek shares fell 2.6pct, while the country´s banking stocks slipped 4.6pct with speculation that a debt restructuring could be imminent. The FTSEurofirst index rose 1.8pct. The German Dax gained 3pct and the UK FTSE rose 2.1pct.

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US sharemarkets rallied on Wednesday, driven by upbeat earning from technology firms Intel and United Technologies. The PHLX semiconductor index jumped 4.3pct. The S&P 500 rose above its 20-day moving average. Apple shares gained 2.5pct in after-hours trade after a strong earnings result that was well ahead of expectations. The Dow Jones index rose 187pts or 1.5pct with the S&P 500 higher by 1.4pct while the Nasdaq gained 58pts or 2.1pct.

US treasuries fell on Wednesday (yields higher) in light volumes. Strong corporate earnings and healthy demand at a Spanish bond auction helped spur investor risk appetite. US 2yr yields rose by 1pt to 0.669pct and US 10yr yields rose by 4pts to 3.406pct.

The US dollar slumped against major currencies as concern about the US fiscal position continued to drive market sentiment. Traders also bet that US interest rates would remain at record lows. The Euro rallied from lows near US$1.4390 to US$1.4540, ending US trade near US$1.4510. The Aussie dollar rose from lows near US105.80c to US107.10c holding currently near its highs. And the Japanese yen traded between 82.95 yen per US dollar to near JPY82.30, before closing US trade at JPY82.45.

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US crude oil prices rallied on Wednesday as the weaker dollar and strength in equity markets supported the bid for oil. The weekly EIA energy report showed that US crude stockpiles fell 2.32 million barrels last week, against expectations for a 1.1million barrel build. The Nymex crude oil contract rose by US$3.30 or 3.1pct to US$111.45 a barrel. The London Brent crude rose by US$2.52 to US$123.85 a barrel.

Base metal prices were higher on the London Metal Exchange on Thursday. The upbeat corporate earnings, buoyant US housing data improved risk appetite. While US dollar weakness also supported the demand for commodities. The gold price rose to fresh record highs. The Comex gold futures price touched US$1506.50 an ounce, before closing up US$3.80 an ounce to US$1,498.90.

Ahead: In Australia, producer price data is released. In the US, the leading indicators index and the Philadelphia Fed index are both released.

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