US economic data: New home sales fell by 8.1 per cent in June -- the biggest decline in almost a year. US jobless claims fell by 19,000 to 284,000 -- the lowest level in nearly eight and a half years. US Flash PMI fell from 57.3 to 56.3 in July, below analyst expectations for a reading of 57.5.
European shares rose on Thursday as better-than-expected economic data and strong corporate results in Spain supported optimism about the region’s recovery. Spain's IBEX rose by 1.9 per cent. Portugal's PSI 20 rose for a second day, up 1.4 per cent. The FTSEurofirst 300 index rose by 0.5 per cent, with the German Dax up by 0.4 per cent, while the UK FTSE 0.3 per cent higher. Australia's major miners were higher in London trade with shares in BHP Billiton up by 0.8 per cent while Rio Tinto rose 1.5 per cent.
US sharemarkets were mostly flat on Thursday as corporate earnings painted a mixed picture of the economy. Facebook shares jumped 6.5 per cent and hit an intraday record high, a day after reporting earnings that beat expectations. Caterpillar raised its full-year outlook but posted a decline in sales and the stock slid 3.1 per cent. The Dow Jones index fell by 3 points. The S&P 500 index gained 0.1 per cent, while the Nasdaq fell by 2 points.
US treasury prices fell on Thursday (yields higher) as the upbeat jobless claims figures boosted demand for growth assets. US 2-year yields rose by 2 points to 0.49 per cent while US 10-year yields rose by 4 points to 2.51 per cent.
Major currencies were mixed against the US dollar following European and US sessions on Wednesday. The euro rose from lows near $US1.3440 to around $US1.3485, before ending US trade near $US1.3465. The Aussie dollar fell from highs near US94.50c to lows near US94.10c before ending the US session near US94.20c. And the Japanese yen traded between 101.40 yen per US dollar and JPY101.85, ending US trade near JPY101.80.
World oil prices fell on Thursday, as weak demand from European miners and IMF cuts to Chinese and US growth forecasts weighed on prices. However political tensions in the Middle East and the lift in Chinese factory activity kept a floor on prices. Brent crude fell by US94c or 0.9 per cent to $US107.19 a barrel and the US Nymex price fell by $US1.05 a barrel or 1.0 per cent to $US102.07 a barrel.
Base metal prices were higher on Thursday supported by the lift in Chinese manufacturing activity to a 18-month high. Copper outperformed up by 2 per cent while other metals rose between 0.6 per cent-1.3 per cent. Gold prices eased on Thursday with the Comex gold futures quote down by $US13.90 or 1.1 per cent to $US1,290.80 per ounce. Iron ore fell by US70c on Thursday or 0.7 per cent to $US93.60 a tonne.
Ahead: In Australia no economic data is released. In US data durable goods orders are released.
Craig James is the chief economist at Commsec.