US economic data, jobless claims rose by 17,000 to 283,000 last week. US markit "flash" manufacturing fell from 57.5 last month to 56.2 in October. Across the sub-indices, new orders growth eased markedly, with new export sales falling sharply. US FHFA home prices rose 0.5 per cent in August to be up 4.8 per cent over the year. The US leading indicators index rose by 0.8 per cent in September -- pointing to solid growth economic for the rest of the year.
European shares rose in a choppy trading session on Thursday. The economic data was upbeat with the Markit "flash" eurozone manufacturing index lifting from 50.3 to 50.7 in October. But it took the lift in US markets and strong US earnings to drive European markets higher. The FTSEurofirst 300 index rose by 0.7 per cent while the UK market rose by 0.3 per cent and the German Dax lifted by 1.2 per cent. But Australia's major miners were weaker in London trade with shares in BHP Billiton down by 0.4 per cent while Rio Tinto lost 0.9 per cent.
US sharemarkets rallied sharply on Thursday. Strong earnings results from industrial bellwethers were the catalyst for the lift in sentiment. Caterpillar (up 4.6 per cent) and 3M (up 4.5 per cent) beat expectations and raised full-year outlook. The S&P industrial sector climbed 2.2 per cent. However gains were pared back marginally late in the session after news broke that a New York doctor may have contracted Ebola. The Dow Jones peaked almost 310 points higher before closing up by almost 217 points or 1.3 per cent with the S&P 500 index up by 1.2 per cent while the Nasdaq gained 70 points or 1.6 per cent.
US treasury prices fell on Thursday (yields higher) as investors digested good corporate earnings and strong economic data -- reducing the demand for safe-haven government bonds. US two-year yields rose by two-points to 0.39 per cent while US 10-year yields rose by 5 points to 2.28 per cent.
Major currencies were mixed against the greenback over the European and US sessions on Thursday. The Euro hit early lows near $US1.2615 before lifting to highs near $US1.2675, ending US trade near $US1.2650. The Aussie dollar held between US88.05c and US87.50c ending the US session near US87.55c. And the Japanese yen weakened from ¥107.15 per US dollar to ¥108.35, ending US trade near ¥108.15.
World oil prices rebounded on Thursday after an industry source said Saudi Arabia cut output in September despite reporting a lift in production to OPEC. Brent crude rose by $US2.12 or 2.5 per cent to $US86.83 a barrel while the US Nymex crude price rose by $US1.57 or 1.9 per cent to $US82.09 a barrel.
Base metal prices were mostly weaker on the London Metal Exchange on Thursday, with the exception of copper (up 1 per cent). Aluminium (down 1.2 per cent) led the declines. Gold fell on Thursday with the Comex gold futures quote down by $US16.40 an ounce or 1.3 per cent to $US1,229.10 per ounce. Iron ore fell $1.50 to $US80 a tonne.
Ahead: In Australia, no economic data is released. In the US, new home sales figures are released. UK September quarter GDP is released.
Savanth Sebastian is an economist at CommSec.