In US economic data, the economy, as measured by GDP, contracted at a 1.5% annual pace in the March quarter (second estimate, survey: -1.3%). Initial jobless claims fell by 8,000 to 210,000 in the past week (survey: 215,000). Pending home sales dipped by 3.9% in April (survey: -2.1%). The Kansas City Fed manufacturing index eased from 25 to 23 in May (survey: 15).

European sharemarkets advanced on Thursday. The panEuropean STOXX 600 index rose by 0.8% with retail stocks up 4.7%. The German Dax index lifted by 1.6% and the UK FTSE index gained 0.6%. Shares of British retailers Ocado, Marks & Spencer, Next and Associated British Foods rallied between 4.4% and 11.5% after the British government unveiled a new £15 billion package of support for UK households. In London trade, shares in Rio Tinto fell by 0.3% while BHP shares dipped by 0.6%.

US sharemarkets climbed on Thursday after upbeat earnings guidance from US retailers. Shares of department store operator Macy’s jumped 19.1% after it raised its annual profit forecast. And shares of discount store chains Dollar General (+13.7%) and Dollar Tree (+21.9%) both advanced following their annual sales forecast hikes. Chipmaker Broadcom’s US$61 billion acquisition of VMware also boosted risk appetite. Broadcom’s shares rose 3.6% with VMware’s shares up 3.2%. The Dow Jones index closed higher by 517 points or 1.6%. The S&P 500 index rose by 2%. And the Nasdaq index gained 306 points or 2.7%.

Shorter-dated US treasury yields fell on Thursday (yields lower), with inflation fears continuing to dissipate as US economic data and corporate announcements point to slower economic growth. The US Treasury sold US$42 billion of 7-year notes at a yield of 2.777% into strong demand. US 10-year yields were steady near 2.74%. But US 2-year yields dipped around 2 points to near 2.48%.

Major currencies were mostly stronger against the US dollar in European and US trade. The Euro rose from lows near US$1.0661 to highs near US$1.0729 and was near US$1.0725 at the US close. The Aussie dollar firmed from lows near US70.59 cents to highs near US71.02 cents and was near US70.95 cents at the US close. But the Japanese yen eased from 126.55 yen per US dollar to JPY127.41 and was near JPY127.05 at the US close.

Global oil prices advanced around 3% on Thursday after US government data released on Wednesday showed that US gasoline stockpiles fell to the lowest level since 2014 ahead of the summer driving season. The Brent crude price rose by US$3.37 or 3% to US$117.40 a barrel. And the US Nymex crude price added $3.76 or 3.4% to US$114.09 a barrel.

Base metal prices were mixed on Thursday with tin down 1.2% and copper 0.2% lower, but nickel gained 1.6%.

The gold futures price rose by US$1.30 or 0.1% to US$1,847.60 an ounce. Spot gold was trading near US$1,851 an ounce at the US close. The iron ore futures price shed 87 cents or 0.7% to US$132.47 a tonne as Chinese steel mills cut output. Ahead: In Australia, retail trade data is issued. Chinese industrial profits figures are due. US data on personal income and spending, inventories, consumer confidence and goods trade are all scheduled.

Originally published by CommSec