The People´s Bank of China has lifted interest rates for the second time in just over a month. The 1-year deposit rate will be lifted 25 basis points to 3.00pct while the 1-year lending rate is up 25bps to 6.06pct.

Dallas Federal Reserve president Richard Fisher said he would oppose any further easing of monetary policy. Meanwhile Atlanta president Dennis Lockhart said inflation was ´´tame´´ and that increases in some individual prices didn´t signify broader pressures.

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US chain store sales rose by 2.7pct last week compared with a year earlier according to Redbook Research.

European shares were mixed on Tuesday in response to China´s decision to lift interest rates. The FTSEurofirst index fell by 0.1pct, but the UK FTSE rose 0.7pct with the German Dax up 0.5pct. In London trade, mining shares were higher with Xstrata up by 1.7pct with Rio Tinto up 1.9pct and BHP Billiton up 0.8pct.

US sharemarkets rose again on Tuesday with investors shrugging off China´s decision to lift interest rates. Shares in McDonalds rose by 3.0pct after the fast-food giant announced that January same store sales beat market expectations. Of interest, a small start up company, Gateway Industries, was up 20,100pct today. At the close of trade, the Dow Jones index was up 71pts or 0.6pct with the S&P 500 up 0.4pct and the Nasdaq was higher by 13pts or 0.5pct.

US treasuries fell again on Tuesday (yields higher). Investors fretted about global inflationary pressures following China´s decision to raise rates for the third time since October. US 2yr yields rose by 8pts to 0.85pct and US 10yr yields lifted by 10pts to 3.73pct.

Major currencies again largely tracked sideways against the greenback during European and US trade on Tuesday. The Euro held between US$1.3590 and US$1.3690 and was near US$1.3635 in late US trade. The Aussie dollar traded between US101.10c and US101.90c, and was near US$101.45c in late US trade. And the Japanese yen traded from 81.80 yen per US dollar to around JPY82.30, and was near JPY82.35 in late US trade.

US crude oil prices fell again on Tuesday. While strike activity has occurred in the Suez Canal region, a senior canal officer told Reuters that they wouldn´t affect canal operations. The Nymex crude oil contract fell by US54c (0.6pct) to US$86.94 a barrel. But London Brent crude rose by US67c to US$99.92 a barrel.

Base metal prices were again little changed on the London Metal Exchange on Tuesday. All metals rose between 0.1-0.5pct except lead which lost 1.1pct. And the gold price rose to three-week highs on Tuesday on global inflation concerns with the Comex gold futures price up US$15.90 an ounce to US$1,364.10.

Ahead: In Australia, consumer sentiment data is released. Commonwealth Bank, Boral and Stockland are amongst those releasing half-year results. In the US, Federal Reserve chairman Ben Bernanke delivers testimony.
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