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Financial Focus

Eurozone leaders scrambled to bail out another two banks yesterday after unveiling a 4bn rescue of Dexia, the bakrupt Belgian lender. Max Bank which was felled by property write down loans will see its toxic assets taken over by the Danish government, while Sparekassen Sjaelland snaps up the good assets.

Prime Minister Putin may give Asia more weight in Russian foreign policy when he returns to the presidency next year, broadening a relationship with China and trying to bridge differences on gas exports.

EUROPEAN leaders pushed back a debt-crisis summit amid opposition to German Chancellor Andrea Merkel’s drive for a deeper-than-planned write down of Greek bonds. The meeting was postponed as Europe gropes toward a master plan for dealing with Greece’s oversized debt, insulating the Spanish and Italian markets, and shielding banks from the fallout.

MARKETS:

ASIAN stocks rose this morning as Chinese lenders surged as a state owned investment company bought bank shares and Japanese equities climbed after resuming trade after a holiday. The MSCI Asia Pacific Index gained 2.1% as commodity prices also advanced. Japan’s Nikkei 225 advanced 2%, the Hang Seng surged 3.3%, while Australia’s SAP/ASX 200 gained 0.6%.

EUROPEAN stocks are seen to be steady today, pausing from a brisk four day rally as investors wait to see if Slovak lawmakers will approve the expansion of the Eurozone rescue fund before making bolder bets on the recovery of risky assets. Slovakia is the last of the 17 member bloc yet to vote on the deal agreed by the regions leaders in July to boost the size of the European Financial Stability Facility.

CURRENCIES:

THE EURO traded 0.5% from its strongest in almost three weeks after a China state-run fund said it began buying shares of the nation’s biggest banks, bolstering Asian stocks and demand for higher-yielding assets. The euro maintained yesterday’s advance against the yen which came after Germany and France pledged to deliver a plan to support banks.

ENERGY:

OIL traded near the highest price in two weeks on signs that crude exports from Kuwait and Nigeria may be disrupted as workers strike, while a rally in equity markets underscored speculation Europe will contain its debt crisis.

COMMODITIES:

THE BIGGEST rout in soybean prices in more than two years may be ending as farmers from Iowa to Brazil fail to keep pace with the record demand for cooking oil and livestock feed. The U.S., the world’s largest grower and exporter will harvest 7.3% less this year, leading the first decline in global output since 2009. The use of soybeans expanded at almost four times the pace of the world population in the past decade, led by China.

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