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Financial Focus

The ECB exceeded expectations by purchasing 22bn worth of debt from the troubled Eurozone governments last week. The ECB announced the figure yesterday,which surpassed the 16.5 bn in bonds that it purchased in May 2010, when it intervened in a bid to save the Greek government.

China boosted its holdings of US government debt for a third straight month to $1.17 trillion in June, whilst other foreign investors were sellers of treasuries for the first time since 2009.

US banks relaxed their lending standards further during recent months as competition intensified amongst financial institutions and demand increased for many types of loans, according to a Federal Reserve survey. The findings indicate continued improvement in lending conditions heading into the third quarter, particularly among business customers.

MARKETS:

JAPANESE stocks swung between gains and losses amid thin holiday trading as utilities and shipping companies dropped. The Nikkei 225 fell 0.1% as of 13:21 in Tokyo. Futures in the S&P 500 index slipped 0.4%. The index gained 2.2% yesterday in New York, erasing last week’s drop.

THE FTSE 100 is seen opening up this morning extending its recent bounce back in tandem with strong gains overnight on Wall Street and in Asia. However, gains in London will be limited as investors focus on a key meeting in Paris today to discuss further steps to alleviate the euro zone debt crisis. The UK blue chip index closed up 30.55 points or 0.6% yesterday, extending its rally into a third session since hitting a one year closing low on Wednesday, with strength in energy and mining stocks providing the main prop.

CURRENCIES:

THE EURO traded 0.3% from a three week high on prospects a meeting between French president Nicolas Sarkozy and German Chancellor Angela Merkel will result in action to contain the regions debt crisis. The dollar was 0.7% from its lowest in two weeks against the yen and the Australian dollar slid after minutes of the Reserve Banks last meeting showed policy makers kept interest rates unchanged on concern global economic growth may slow.

ENERGY:

OIL dropped from the highest point in almost two weeks as investors bet that signs of a slowing global economy indicate that fuel demand will falter. Futures slid as much as 0.7% before reports which may show U.S. housing starts and building permits fell in July and European growth eased last quarter.

COMMODITIES:

GOLD may climb for a second day as physical buyers made purchases after the metal’s drop from its all-time high above $1,800 an ounce. Immediate delivery bullion, which hit a record $1,814.95 on August the 11th, was little changed at $1,765.10 at 12:03 in Singapore. December delivery gold gained for a second day on the Comex in New York, rising as much as 0.8%.

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