US markets erased earlier gains in overnight trading as optimism over a drop in jobless claims faded. There was a host of economic data for markets to digest, with the most positive being a surprisingly sharp fall in weekly US jobless claims to a four year low.

The early gains on Wall Street fizzled after trade data revealed weaker demand for US exports and investors adopted a guarded approach ahead of profit releases from banking majors, JP Morgan and Wells Fargo. The Dow let go of 19 points (-0.1%), settling at 13326. The Nasdaq also slipped 0.1% whilst the S&P500 closed flat.

European equities held onto their gains, with the FTSE up 0.9%, the German DAX climbing 1.1% and the French CAC jumping 1.4%. Volatility was again the theme in oil markets, with crude rising 0.9% percent to US$92.07 amid growing tensions in the Middle East and despite a bigger-than-expected rise in weekly US stockpiles.

In the currency space, the euro rose on hopes S&P's downgrade of Spanish debt will force the country to request a sovereign bailout. The greenback weakened against a number of other currencies as the US jobless claims data encouraged risk appetite, whilst the Aussie dollar strengthened to US$1.0264 on the back of yesterday's solid domestic jobs report. There is no major economic data due for release today.

Morning Market Analysis: US Markets Ease is a post from: Australian Stock Report Market Pulse Blog