US annual consumer prices jumped 9.1 per cent in June, the largest increase in more than four decades, leaving Americans to dig deeper to pay for petrol, food, healthcare and rents. 

The bigger-than-expected rise in the year-on-year consumer price index (CPI) reported by the US Labor Department on Wednesday also reflected higher prices for a range of other goods and services, including motor vehicles, apparel and household furniture.

On a monthly basis, the US CPI increased by the most in nearly 17 years. 

The US inflation data followed stronger-than-expected jobs growth in June and suggested that the US central bank's aggressive monetary policy stance had made little progress thus far in cooling demand and bringing inflation down to its 2 per cent target.

With rents surging by the most in 36 years, inflation could become entrenched.

Australian shares rose on Thursday, lifted by mining and gold companies after a sharp rebound in commodity prices, although worries over hot US inflation data and an impending rate hike capped gains.

By 1:23pm AEST, the ASX 200 was up 23 points, or 0.4 per cent, to 6,644.

At the same time, the Australian dollar was up to 67.81 US cents.

Leading gains on the benchmark index, export-centric miners advanced as much as 2.4 per cent, snapping from a three-day losing streak, as iron ore prices strengthened on the back of an optimistic China export reading for June.

Mining trio Rio Tinto, BHP Group and Fortescue Metals added between 2.5 per cent and 2.9 per cent.

The gold sub-index gained as much as 1.7 per cent and was set for its best day in one week on strength in bullion.

Sector leaders Northern Star Resources and Newcrest Mining jumped as much as 0.7 per cent and 1.1 per cent, respectively.

Energy stocks climbed as much as 1.6 per cent, with sector majors Woodside Energy and Santos both adding 1.7 per cent.

Financials were giving up as much as 0.9 per cent.

The Commonwealth Bank, NAB, Westpac and ANZ lost between 0.4 per cent and 1.4 per cent.

Lithium developer Lake Resources fell 4.4 per cent even as the company refuted a short seller report criticising partner Lilac Solutions's extraction technology.

Whitehaven Coal added 7.2 per cent, Woodside Energy firmed 1.8 per cent, while Bega Cheese dropped 7.5 per cent in afternoon trade.

Wall Street gulps

Global markets swung wildly on Wednesday as the euro touched 1-to-1 versus the dollar for the first time in 20 years.

The US Federal Reserve is expected to deliver a rate hike of possibly up to 100 basis points this month after a mostly grim inflation report showed price pressures, already running at a 40-year high, accelerating further.

Stripping away volatile food and energy prices — which have abated since the report's survey period — core CPI cooled to an annual rate of 5.9 per cent.

"You would expect the CPI [report] that we saw would be a big risk-off event, but the market has shrugged," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.

"[Investors] were already expecting a very hawkish Fed and I don't think this affects much except uncertainty and that has something to do with why markets aren't selling off today."

US stocks closed modestly lower overnight after investors digested the hotter-than-expected US inflation data.

While all three major US equity indexes bounced off lows reached earlier in the day and, occasionally, edged into positive territory throughout the session, they were all red by the closing bell.

The Dow Jones Industrial Average fell 0.7 per cent, the S&P 500 lost 0.5 per cent, and the Nasdaq Composite dropped 0.2 per cent.

A bevy of central bankers over the past couple of weeks has signalled they would support what would be a second straight 75-basis-points rate increase at their upcoming policy meeting on July 26 and 27.

However, after Wednesday's data from the Labor Department showed rising costs of petrol, food and rent drove the CPI up 9.1 per cent last month, over a year earlier, the view might have changed.

On Wednesday, the Bank of Canada raised its main interest rate by 100 basis points in a bid to crush inflation, surprising markets and becoming the first G7 country to make such an aggressive hike in this economic cycle.

Recession worries had already caused Europe's bourses to stumble, but the headline CPI number was even higher than most economists had forecast.

The pan-European STOXX 600 index lost 1 per cent and MSCI's gauge of stocks across the globe shed 0.3 per cent.

On oil markets, Brent crude was up, trading at $US99.88 a barrel, by 07:37am AEST.

ABC/Reuters

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