In US economic data, consumer credit rose by a less-than-expected $17.26 billion to $3.21 trillion in June. Revolving credit, which mostly measures credit-card use, increased only $941.54 million after a downwardly revised $1.74 billion in May -- it was still the fourth consecutive monthly increase. US jobless claims fell by 14,000 to 289,000 last week.
European shares fell on Thursday, as concerns about Portugal's banking system and tensions along the Russia/Ukraine border hit sentiment. Lisbon's benchmark PSI-20 index closed down 2.3 per cent. Russia imposed a one-year ban on all imports of meat, fish, dairy, fruit and vegetables from the US, EU, Canada, Australia and Norway. As expected the European Central Bank kept its main interest rate at a record low of 0.15 per cent. The FTSEurofirst 300 index fell by 0.7 per cent with the German Dax down by 1 per cent while the UK FTSE lost 0.6 per cent. Australia's major miners were weaker in London trade with shares in BHP Billiton down 2.1 per cent while Rio Tinto lost 0.5 per cent.
US sharemarkets fell on Thursday but closed off their session lows. Concerns about sanctions between Russia and the west erased early gains after the upbeat employment data. The Dow Jones index ended lower by 75 points or 0.5 per cent with the S&P 500 index down 0.6 per cent while the Nasdaq lost 20 points or 0.5 per cent.
US treasury prices rose on Thursday (yields lower) as news that a Ukrainian fighter jet had been downed rattled investors and drove safe-haven demand. US 2-year yields fell by 4 points to 0.43 per cent while US 10-year yields fell 6 points to 2.41 per cent.
The euro eased against the US dollar on Thursday, following the ECB decision to keep interest rates on hold but still keep the door open for QE. The Euro fell from highs near $US1.3385 to lows around $US1.3335, ending US trade near $US1.3360. The Australian dollar fell to early lows near US92.60c before lifting to highs near US92.80c, ending the US session near US92.70c. And the Japanese yen strengthened from 102.35 yen per US dollar to JPY101.95, ending US trade near JPY102.05.
World oil prices rose on Thursday after reports that the US was considering airstrikes on Islamic militants in Iraq revived concerns about supply disruptions. Brent crude rose by US64 cents or 0.6 per cent to $US105.44 a barrel and the US Nymex price rose by US42 cents to $US97.34 a barrel.
Base metal prices were mostly higher on Thursday with the exception of zinc which fell 1.4 per cent. Copper lifted from a five week low up 0.5 per cent. Other metals lifted between 0.2 per cent and 1.1 per cent. Gold prices rose on Thursday supported by safe-haven buying. Comex gold futures quote rose by $US4.30 or 0.3 per cent to $US1,312.50 per ounce. Iron ore rose by US10c on Thursday or 0.1 per cent to $US96.00 a tonne.
Ahead: In Australia, the RBA Statement on Monetary Policy is released. In the US, wholesale inventories are released.
Craig James is chief economist at Commsec.