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Financial Focus

CHINA’s MANUFACTURING, South Korean exports and Taiwan’s economy are all expanding at the slowest pace since 2009, based on data released since late yesterday. China’s said its Purchasing Managers’ Index fell to 50.4 in October from 51.2 the previous month. A level of 50 is the dividing line between growth and contraction. China is Asia’s biggest economy and the primary export destination for South Korea and Taiwan.

US MANUFACTURING probably expanded at a faster pace in October, driven by gains in exports and consumer spending that are keeping the recovery intact, economists said before a report today. A Bloomberg survey forecasts the Institute for Supply Management’s factory index will rise to 52 from 51.6 a month ago. Another report may say construction spending rose in September.

PRIME Minister George Papandreou pledged to hold a referendum on the EU’s latest bailout plan for Greece, before G-20 leaders meet on Thursday in France to discuss the debt crisis. The referendum on the EU accord, is likely be held after details of the plan are finalised, Papandreou said. Papandreou also said he’d seek a vote of confidence in parliament.

MARKETS:

THE BEST month in stocks since 2009 pushed equities past bonds, commodities and the dollar for the first time in a year after European leaders took action to contain the debt crisis. Share values in October rose by about $4.5 trillion as the MSCI All-Country World Index jumped 11% on speculation the global economy will avoid a recession, according to data compiled by Bloomberg. The Standard & Poor’s GSCI Total Return Index of commodities climbed 9.8%.

Japanese stocks fell for a second day after Panasonic Corp. forecast its biggest loss in a decade and Europe’s debt solution was put into doubt by the Greek PM. The Nikkei share average fell on Tuesday after downbeat domestic earnings reports and fresh worries about Europe prompted profit-taking in exporters and recent gainers.

EUROPEAN shares are set to fall on Tuesday, extending Monday’s hefty falls in tandem with drops on Wall Street and in Asia as Greek Prime Minister George Papandreou put Europe’s debt agreement at risk with a promise to let voters decide whether they’ll take the deal.

CURRENCIES:

THE EURO extended yesterday’s 2.1% loss against the dollar amid speculation a report tomorrow will confirm the region’s manufacturing shrank for a third month. That may add pressure on the ECB to consider cutting interest rates at its next policy meeting on Thursday.

ENERGY:

OIL dropped for a third day in New York on speculation commodity demand will falter as Chinese manufacturing slows and European leaders struggle to contain the region’s debt crisis. Futures slid as much as 1% through the night after posting their biggest gain last month since May 2009.

COMMODITIES:

COPPER in London dropped as much as 1.4%, falling for the second day, as base metals declined on concern the deepening European debt crisis will damp demand for raw materials. STEELMAKER demand for iron ore, the biggest source of cargoes for commodity carriers, is weakening, threatening to end the most profitable shipping rates in almost a year.

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