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Financial Focus

GERMANY’s finance minister, Wolfgang Schaeuble, said on Monday that even though European governments would adopt a five-point platform to address the crisis, a definitive solution would not be reached at the October 23rd European Union summit. This came in the heels of a Group of 20 meeting of finance ministers in Paris the past weekend, which had raised expectations that European banks would be recapitalised, and the region’s bailout fund expanded to deal with a potential debt default by Greece.

CHINA’s economy grew 9.1% in the third quarter from a year earlier, the slowest pace since 2009, as the central bank tightened monetary policy and export demand weakened. Policy makers have raised interest rates five times over the past year, curbed lending and imposed limits on home purchases to rein in property and consumer prices.

MOODY’s warned on Monday it may slap a negative outlook on France’s Aaa credit rating in the next three months if the costs for helping to bail out banks and other euro zone members stretch its budget too much.

MARKETS:

EUROPEAN stocks were lifted yesterday, but markets across the continent closed down as optimism of a debt-solution faded with ill-timed comments from Germany. US stocks also suffered, with the Dow Jones closing down and the CBOE Volatility index, Wall Street’s so-called fear gauge, rising 16%, its highest one-day jump since August.

ASIAN stocks fell, driving the MSCI Asia Pacific Index toward its biggest drop in two weeks, as Germany damped expectations of a fast resolution to Europe’s debt crisis and China’s economy grew at the slowest pace in two years.

EUROPE’s main stock indexes are expected to fall today, extending the previous session’s retreat after disappointing US earnings, easing Chinese growth, and Moody’s warning on France’s triple-A credit rating.

CURRENCIES:

THE YEN and dollar fell versus most major counterparts overnight before a US report that economists said will show an expansion in the world’s largest economy is being sustained, damping demand for safer assets. Asian currencies weakened after Germany dismissed speculation European policy makers would resolve their debt crisis as early as this weekend. The euro failed to breach a September high against the dollar, ending around $1.39 yesterday.

ENERGY:

OIL traded near a two-day low in New York after China said its economy slowed and US crude supplies were forecast to increase. An Energy Department report due tomorrow is expected to show US crude stockpiles climbed for a second week, and analysts believe that prices have advanced too fast to be sustainable.

COMMODITIES:

COPPER slumped for a second day as expectations of a breakthrough in Europe’s debt crisis at this weekend’s summit weakened, and news of China’s growth slowdown surfaced. All base metals declined. “Looking ahead, how Europe’s debt crisis will evolve will decide copper-price direction,” said an analyst at Industrial Futures Co.

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