The US ADP private sector employment report supported the view that the US economy was picking up steam. The private sector added 187,000 jobs in January following on from the downwardly revised 247,000 jobs added in December. The January result was well ahead of expectations. The non-farm payrolls report on Friday is expected to show a rise of 145,000 jobs for January.

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European shares edged higher on Wednesday. Mining shares posted solid gains in response to higher metal prices. The STOXX Europe 600 Resources index gained 2.1pct as copper prices remained near record highs. In London, banks found good support on improved investor sentiment. Standard Chartered rose 1.7pct. The FTSEurofirst index rose by 0.2pct with the UK FTSE up 1.6pct and the German Dax was higher by 1.5pct.

US sharemarkets were mostly unchanged on Wednesday with stocks managing to hold on to the previous sessions sharp gains. The strong employment data was tempered by the fresh clashes between authorities and citizens in Egypt. At the close of trade, the Dow Jones index was up by 2pts with the S&P 500 down 0.3pct and the Nasdaq was lower by 1pt.

US treasuries fell again on Wednesday (yields higher). Better-than-expected economic data supported a switch away from safe-haven assets. The US treasury department said it will auction $72 billion in notes next week - in line with expectations. US 2yr yields rose by 5pts to 0.66pct and US 10yr yields rose by 3pts to 3.48pct.

The US dollar strengthened against major currencies In European and US trade on Wednesday. The Euro fell from highs near US$1.3855 to US$1.3775, and was near US$1.3810 in late US trade. The Aussie dollar fell from highs around US101.25c to US100.55c, and was around US100.80c in late US trade. And the Japanese yen eased from 81.40 yen per US dollar to around JPY81.80, and was near JPY81.55 in late US trade.

US crude oil prices pared early gains following the rebound in the US dollar. The release of the weekly inventory data also pressured oil prices. US crude stockpiles rose 2.6 million barrels last week as refiners rebuilt stockpiles following the sharp drawdown late last year. The Nymex crude oil contract rose by US9 cents (0.1pct) to US$90.86 a barrel. London Brent crude fell by US21c to US$101.53 a barrel.

Base metal prices mostly held on to the previous session´s gains on the London Metal Exchange. However the recovery in the US dollar did pressure commodities in late trade. Aluminium fell 1.2pct while Lead gained 0.5pct. And the gold price eased on Wednesday as the US dollar strengthened. The Comex gold futures price lost US$8.20 an ounce to US$1,332.10.

Ahead: In Australia, data on building approvals and trade data is released. In the US, the ISM non-manufacturing index and factory orders are released.

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