US economic data, the Consumer Price Index rose by 0.1 per cent in September while the core index (excludes food and energy) also rose by 0.1 per cent. Prices are up 1.7 per cent on a year ago. The mortgage market index soared by 11.6 per cent with the refinancing index up 23.3 per cent in the latest week.
European shares rose on Wednesday with investors encouraged by positive corporate earnings and a mild reading on inflation in the US. However, British American Tobacco lost 2.6 per cent and Heineken lost 1 per cent after reporting weaker tobacco and beer sales respectively. The FTSEurofirst 300 index rose by 0.7 per cent while the UK market rose by 0.4 per cent and the German Dax lifted by 0.6 per cent. But Australia's major miners were weaker in London trade with shares in BHP Billiton down by 1.5 per cent while Rio Tinto lost 1.6 per cent.
US sharemarkets rose modestly in early trade but then fell over the day on news of a shooting at the Canadian parliament in Ottawa. Shares in Yahoo and Broadcom rose in response to positive earnings results. The Dow Jones closed near the lows of the day, down by almost 154 points or 0.9 per cent with the S&P 500 index down by 0.7 per cent while the Nasdaq lost 37 points or 0.8 per cent.
US treasury prices were little changed on Wednesday as investors digested good corporate earnings, mild inflation data and falls on US equities markets. US two-year yields were down 1 point to 0.366 per cent while US 10-year yields were steady at 2.22 per cent.
Major currencies eased against the greenback over the European and US sessions on Wednesday. The Euro fell from highs near $US1.2740 to lows near $US1.2635, ending US trade near $US1.2645. The Aussie dollar held between US87.65c and US88.15c ending the US session near US87.75c. And the Japanese yen weakened from ¥106.78 per US dollar to ¥107.37, ending US trade near ¥107.14.
World oil prices fell sharply on Wednesday after US data showed a sharp 7.11 million barrels lift in crude oil stockpiles in the latest week. Analysts had tipped a more modest 2.7 million barrel increase in inventories. Brent crude fell by $US1.51 or 1.8 per cent to $US84.71 a barrel while the US Nymex crude price fell by $US1.97 or 2.4 per cent to $US80.52 a barrel.
Base metal prices were mostly higher on the London Metal Exchange on Wednesday, with the exception of copper (down 0.4 per cent) and nickel (down 0.6 per cent). Zinc (up 2.3 per cent) and aluminium (up 1.3 per cent) led the gains. Gold fell on Wednesday with the Comex gold futures quote down by $US6.20 an ounce or 0.5 per cent to $US1,251.70 per ounce. Iron ore was unchanged at $US81.50 a tonne.
Ahead: In Australia, the Reserve Bank Governor delivers a speech on payment system issues. In the US, the FHFA home price index is released with the "flash" manufacturing index. In China the "flash" manufacturing index is released.