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Financial Focus

Deep divisions have appeared amongst senior Federal Reserve officials, the minutes to the Fed’s August meeting exposed last night. The minutes revealed that ‘a few’ members are pushing for ‘a more substantial’ loosening of policy, widely assumed to be a third period of quantitative easing.

A DISPUTE has erupted over the control of Libya’s $65bn sovereign wealth fund, as the National Transitional Council attempts to maintain stability in the nation. Several NTC members have contested the authority of Mahmoud Badi, who is probing corruption at the Libyan Investment Authority.

CONSUMER confidence has sunk further on both sides of the pond, according to fresh data. A widely regarded measure of sentiment in the UK high street was confirmed this morning at 13 points below its level at the same time last year. The Gfk NOP consumer index also revealed a gloomier outlook for the UK’s ‘general economic situation’ for the next 12 months. The news mirrored data released in the U.S. yesterday, where a gauge of consumer sentiment dropped to its lowest level since April 2009.

MARKETS:

FUTURES on the S&P 500 added 0.1% today. In New York, the index rose 0.2% yesterday after minutes of the Fed meeting showed some policy makers favoured more aggressive action to stimulate the economy.

EUROPEAN shares are expected to open mixed this morning, with investors staying cautious ahead of key economic releases this week to see if the economic picture might prompt the U.S. Federal Reserve to announce stimulus measures at its next meeting. The focus will be on jobless claims data tomorrow and non-farm payrolls figures on Friday.

JAPAN’S Nikkei 225 fell 0.1%, having swung between gains and losses at least 10 times, after a report showed Japan’s industrial production rose less than expected in July.

CURRENCIES:

THE EURO fell for a second day against the yen as economists forecast unemployment in the region remained, last month, at its highest level since February. The euro also maintained losses versus the dollar on speculation the ECB will cut borrowing costs to support growth.

ENERGY:

OIL declined, heading for the biggest monthly drop since May, as investors speculated that increasing crude stock piles in the U.S. indicate fuel demand is faltering in the world’s biggest consumer of the commodity.

COMMODITIES:

COPPER slumped for the first day in six, heading for the biggest monthly drop since January 2010, as worsening U.S. consumer confidence stoked global concern that global growth may stall. Tin was set for the largest loss since October 2008.

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