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UPDATE 1-Fortress macro fund co-investment chief Feig leaving firm-sources

July 06, 2015 - reuters.com

(Adds details on moves, performance, background) By Svea Herbst-Bayliss and Nishant Kumar BOSTON/LONDON, July 6 (Reuters) - Jeff Feig, the co-chief investment officer of hedge fund Fortress Investment Group LLC's FIG.N macro fund is leaving the company after less than a year, with Michael Novogratz becoming sole CIO, three sources with knowledge of the changes said. This marks the second time in roughly six months that the $70 billion fund company is making changes at its macro fund, which started the year off with heavy losses after being wrong-footed on its Swiss franc trade. Feig, 48, joined Fortress less than a year ago from Citigroup Inc C.N , where he was a foreign exchange specialist. He joined as co-president of Fortress' Liquid Markets business and co-CIO of the Fortress Macro fund with Novogratz, 50. Feig's tenure has been rocky, with the losses on the Swiss franc move coming only a few months after he joined, sources said. In January, Sherif Sweillam, chief risk officer, and Tye Schlegelmilch, a portfolio manager, resigned from the fund. Feig could not be reached immediately for comment. The macro fund and related accounts had $2.8 billion in assets at the end of the first quarter, down from $3.2 billion at the start of the year. The fund itself, which has roughly $1.3 billion in assets, lost 7 percent, net of fees, during the first five months of 2015. June numbers have not yet been released. The sources asked not to be identified because the funds are private and they were not authorized to speak publicly. Investors were informed of the moves by telephone over the weekend. A spokesman for Fortress declined to comment. Novogratz, a former college wrestler known for his blunt market interpretations who helped co-found Fortress, has worked with a number of people on managing the fund. (Reporting by Svea Herbst-Bayliss in Boston and Nishant Kumar in London; Editing by Jeffrey Benkoe) ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters Messaging: svea.herbst.thomsonreuters.com@reuters.net)) Keywords: HEDGEFUNDS FORTRESS/CIO

Russia's Putin, IMF's Lagarde discuss Greece on phone

July 06, 2015 - reuters.com

MOSCOW, July 6 (Reuters) - Russian President Vladimir Putin and Christine Lagarde, the managing director at the International Monetary Fund, discussed the Greek referendum on Monday, the Kremlin spokesman said. "The search for an optimal solution for resolving the Greek debt crisis will continue, taking into account the interests of all parties," Dmitry Peskov told reporters. The phone call between Putin and Lagarde was not linked to any potential Russian help for Greece, he added. The IMF said earlier on Monday that it was monitoring the situation in Greece and was ready to lend a hand if asked following a referendum that rejected the bailout conditions of international creditors. ID:nW1N0ZB000 (Reporting by Katya Golubkova; Editing by Alison Williams) ((ekaterina.golubkova@thomsonreuters.com; +7 495 775 1242;)) Keywords: EUROZONE GREECE/RUSSIA IMF

GLOBAL MARKETS-Stocks and oil drop on worries over Greece, China

July 06, 2015 - reuters.com

* U.S. stocks down after Greece referendum * Europe shares fall but losses limited * Oil sinks 5 percent on worries over Greece, China, Iran (Updates with U.S. markets, changes comments, dateline pvs LONDON) By Noel Randewich SAN FRANCISCO, July 6 (Reuters) - Equity markets around the world fell on Monday and U.S. oil prices slumped 5 percent after Greece overwhelmingly voted against conditions for a rescue package and on unprecedented measures in China to staunch massive recent losses in its stock markets. Wall Street trimmed earlier losses after the International Monetary Fund said it was ready to help Greece if asked to do so. U.S. and European stock declines were less than some had feared. ID:nW1N0ZB000 Beijing introduced unexpected measures over the weekend to staunch a recent 30-percent rout in its stock market since mid-June which had raised investors' concerns about the stability of the world's second-biggest economy. ID:nL3N0ZM1CK Investors took heart after Greece's outspoken finance minister, Yanis Varoufakis, stepped down and Prime Minister Alexis Tsipras said his government was ready to return to negotiations with creditors in a bid to open shuttered banks. "I think what we are seeing now is that initial concerns were overblown," said Adam Sarhan, chief executive of Sarhan Capital in New York. "Cooler heads are prevailing and now Tsipras can go to the creditors and have meaningful conversations. It also helps that the Greek finance minister is out because these negotiations can be very personality driven." European Council President Donald Tusk said euro zone leaders would meet in Brussels on Tuesday evening (1600 GMT). ID:nL8N0ZL12O Stunned European leaders had called for the summit to discuss their next move after the surprisingly strong victory by the 'No' camp during Greek's referendum on Sunday defied opinion polls that had predicted a tight contest. ID:nL1N0ZM0T0 Greek banks, which were shuttered last week after debt negotiations failed, will remain shut Tuesday and Wednesday with a daily limit on cash withdrawals. U.S. oil prices tumbled 5 percent, their most in three months, after Greece's rejection of debt bailout terms and China's emergency measures to support its stock markets shook global markets. Also taking a toll on the energy market were talks between Iran and world powers to meet a July 7 deadline on a nuclear deal. That deal could release more oil into already oversupplied markets if sanctions on Iran are eased. ID:nL3N0ZM01D The Dow Jones industrial average .DJI was down 41.65 points, or 0.23 percent, at 17,688.46. The S&P 500 .SPX lost 3.73 points, or 0.18 percent, to 2,073.05. Earlier it fell as low as 2,058. The Nasdaq Composite .IXIC dropped 2.87 points, or 0.06 percent, to 5,006.35. MSCI's all-country equities world index .MIWD00000PUS lost 0.91 percent, while its emerging markets index .MSCIEF dropped 2.1 percent. The euro zone blue-chip Euro STOXX 50 index .STOXX50E fell 2.32 percent. The pan-European FTSEurofirst 300 index .FTEU3 was down 1.21 percent. The euro was 0.37 percent weaker at $1.1072 EUR= . The dollar index .DXY , a gauge of the greenback against major currencies, edged up 0.14 percent after earlier hitting its highest point in a month. CHINESE RESCUE MEASURES Chinese stocks market climbed, going against the broader tide of declines in world markets. The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen closed up 2.9 percent, while the Shanghai Composite Index .SSEC gained 2.4 percent after brokerages and fund managers vowed to buy massive amounts of stocks, helped by China's state-backed margin finance company. The rapid decline of China's previously booming stock market had become a major headache for China's top leaders, who were already struggling to avert a sharper economic slowdown. The turmoil in Greece and China hurt prices of commodities, including oil. Benchmark Brent crude LCOc1 was down $2.02 a barrel to at $58.30, a decline of 3.37 percent. U.S. light crude CLc1 was 5.11 percent lower at $54.02. ID:nL3N0ZM01D "Uncertainty over Greece is bearish for oil. It adds an extra negative factor on top of the turmoil in Chinese financial markets, the recent rise in U.S. drilling rigs, and a potential increase in Iranian oil supply," said Olivier Jakob, senior energy analyst at Petromatrix in Zug, Switzerland. Benchmark U.S. Treasury yields hovered near their lowest in over two weeks on safe-haven demand. Yields on 10-year Treasuries hit 2.274 percent, their lowest in over two weeks, while long-dated yields hit their lowest in nearly one week at 3.088 percent. ID:nL1N0ZM0T0 (Additional reporting Wayne Cole in Sydney, Hideyuki Sano in Tokyo and Patrick Graham, by Nigel Stephenson, Lionel Laurent and Alistair Smout in London; Editing by Bernadette Baum) ((noel.randewich@thomsonreuters.com; Twitter @randewich)(415 677 2542; Reuters Messaging: noel.randewich.thomsonreuters.com@reuters.net)) Keywords: MARKETS GLOBAL/

Hope dies last in Greece after defiant 'No'

July 06, 2015 - reuters.com

* Greeks persuaded vote was on austerity, not euro - pollster * 'No' voters optimistic better deal can be reached * Greeks believe they called Europe's bluff By Costas Pitas ATHENS, July 6 (Reuters) - Athens was still standing on Monday. The Parthenon had not crumbled before the coming Apocalypse. And as their left-wing government made tentative overtures to its European partners, Greeks expressed hope catastrophe might yet be averted. "I think there will be an agreement," said 21-year-old student Christina Sideri, queuing to withdraw the 60 euros Greeks have been rationed to per day for a week now. "There's no way we'll leave the European Union, and the European Union cannot continue without Greece." Greeks believe they called Europe's bluff on Sunday with a resounding vote to reject the terms of an international aid deal despite the warnings of European leaders they faced being cast adrift from the euro currency bloc. The next few days may yet prove Greeks wrong, but the 61 percent who voted 'No' were won over by the assurances of their left-wing Prime Minister Alexis Tsipras that they were voting on austerity, not on their place in Europe. Thomas Gerakis, of pollster Marc, singled out two public addresses by Tsipras on Friday, armed with a timely report by the International Monetary Fund describing Greece's debt as unsustainable. That has long been Tsipras' chief argument in favour of a writedown on the debt. In a rousing speech to 50,000 people in Athens, he told them a 'No' vote was a vote to stay in Europe, and "live with dignity in Europe". Europe was bluffing, he intimated. "On Sunday, you are not deciding whether Greece stays in Europe, you are deciding whether ... we will accept the continuation of a policy from which even its architects say there is no way out," Tsipras said in a television address on the same day. "What was crucial was the rally and the timing of Tsipras' televised address on Friday, when he said that a 'No' vote does not mean a rupture with the EU but would be a tool for better negotiations," said Gerakis. "That was the key moment when a significant number of voters went from the 'Yes' to the 'No' camp," he said, after most polls in the run-up to Sunday's ballot put the two sides almost neck-and-neck. Despite the 'No' camp's euphoria, officials in Brussels and Berlin said a Greek exit from the currency area now looked ever more likely. CATHARSIS Tsipras returns to Brussels on Tuesday for an EU summit armed with what he will argue is a popular mandate to fight for better terms and debt forgiveness. He will meet fierce resistance from Germany, Greece's biggest creditor and toughest critic, but the noises from Madrid and Rome suggest others in the bloc might be more amenable. "At some point this is going to end," said Sideri. "We can't have capital controls forever, the banks can't be closed forever. Let's hope for something better." Across the road, 40-year-old taxi driver Christos Mitsionis was in good spirits, unusually so given Greece is literally on the verge of running out of cash. "I think they'll reach a solution," he said, with a smile. "Everything needs to be discussed, so we don't find ourselves in this situation again." Gerakis, the pollster, said the referendum may also have provided a vent for Greeks tired of being the bad boys of Europe. After the ignominy of bankruptcy and bailout, and years of plummeting living standards, to say 'No' to their creditors was for many Greeks a moment of catharsis. "I think there was also a psychological reason at play," he said. "A people who have been pressurised for so many years needed to express a degree of pride, especially when they didn't feel it would cost them anything." Tsipras, too, can still bask in the role of newcomer, elected just five months ago as an alternative to the same staid faces of a discredited political elite that has run Greece for 40 years. Ironically, even if he can clinch a new deal, it will involve many of the tenets of the last proposal Tsipras dismissed as a "humiliation". Argyri Alexopoulou, 65 years old and unemployed for the last 25, said Greeks had been duped. "The question was completely unclear," she said, in reference to the densely worded question in the referendum, sprung on Greeks at eight days notice with little time for a real campaign or debate. A cartoon on the front page of top-selling newspaper Ta Nea showed a Greek man rummaging through a giant ballot box. His wife asks, "Is there hope, Mitsos?" He replies, "I'm looking for it." (Writing by Matt Robinson; Editing by Giles Elgood) ((Costas.Pitas@thomsonreuters.com; +44207 542 8024; Reuters Messaging: costas.pitas.thomsonreuters@reuters.net and @Cpitas on Twitter)) Keywords: EUROZONE GREECE/HOPE

WRAPUP 5-Greek finance minister quits to smooth talks after thunderous 'No'

July 06, 2015 - reuters.com

(Adds Greek leaders' statement, Osborne) * Varoufakis resigns, saying euro zone peers forced him out * Tsipras calls Merkel, promises new Greek proposals on Tuesday * ECB delays call on bank funding after top EU officials confer * Europe stocks fall, yields rise, but market reaction muted By Lefteris Papadimas and John O'Donnell ATHENS/FRANKFURT, July 6 (Reuters) - Greece's combative finance minister resigned on Monday, removing one major obstacle to any deal to keep Athens in the euro zone after Greeks voted resoundingly to back the government in rejecting the austerity terms of a bailout. Leftist Prime Minister Alexis Tsipras promised German Chancellor Angela Merkel that Greece would bring a proposal for a cash-for-reforms deal to an emergency summit of euro zone leaders on Tuesday, a Greek official said. It was unclear how much it would differ from other proposals rejected in the past. Gloomy officials in Brussels and Berlin said a Greek exit from the currency area now looked ever more likely. But they also said talks to avert it would be easier without Yanis Varoufakis, an avowed "erratic Marxist" economist who infuriated fellow euro zone finance ministers with his casual style and indignant lectures. He had campaigned for Sunday's 'No' vote, accusing Greece' creditors of "terrorism". "I was made aware of a certain 'preference' by some Eurogroup participants, and assorted 'partners', for my... 'absence' from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement," Varoufakis said in a statement. His sacrifice suggested Tsipras was determined to try to reach a last-ditch compromise with European leaders. Greece's political leaders, more accustomed to screaming abuse at each other in parliament, issued an unprecedented joint statement after a day of talks at the president's office backing efforts to reach a deal with creditors. They called for immediate steps to reopen banks and said any deal must address debt sustainability - code for reducing Athens' crushing debt - but gave no hint of concessions from the Greek side towards lenders' demands for deep spending cuts and far-reaching reforms of pensions and labour markets. The chief negotiator in aid talks with international creditors, Euclid Tsakalotos, a soft-spoken academic economist, was appointed finance minister. Austrian Finance Minister Hans Joerg Schelling said publicly what other euro zone players had said in private: "Varoufakis was someone who massively destroyed trust through his name-calling and by repeatedly criticizing the institutions ... that's why I hope that the basis for talks will now be better." To win any new deal, Greece will have to overcome deep distrust among partners, above all Germany, Greece's biggest creditor and the EU's biggest economy, where public opinion has hardened in favour of cutting Greece loose from the euro. Varoufakis had a particularly acrimonious relationship with Germany's Finance Minister Wolfgang Schaeuble, who said the new Greek minister would not have an easy task. German government spokesman Steffen Seibert said conditions were not yet in place for a resumption of negotiations with Greece. DEFIANCE While jubilant Greeks celebrated their national gesture of defiance late into the night, there was gloom in Brussels. European Commission Vice-President Valdis Dombrovskis said there was no easy way out of the crisis and the referendum result had widened the gap between Greece and other euro zone countries. Tsipras has also spoken by telephone to French President Francois Hollande, who is trying to broker an agreement ahead of Tuesday's Brussels summit. Hollande was due to meet later on Monday with Merkel in Paris to seek a joint response from the euro zone's two leading powers, whose positions have drifted apart. An EU source said barring some major Greek concession, euro zone leaders were more likely to discuss on Tuesday how to cope with a Greek exit, and how to reinforce the remaining currency union, than any new aid programme for Athens. While France and Italy have emphasised the importance of more talks, a big majority of the 19 euro zone government favour taking a hard line with Greece, diplomats said, and German public opinion is running out of patience. Merkel's vice-chancellor, Social Democrat Sigmar Gabriel, told a news conference: "If Greece wants to stay in the euro, the Greek government must quickly make a substantive offer that goes beyond its willingness thus far." A German Finance Ministry spokesman brushed aside Greek demands for a big debt write-down, which the International Monetary Fund said last week may be necessary. He said the IMF was promoting its traditional stance but Europe had opted for solutions other than debt cuts to put countries back on track. The Greek bank association chief said an eight-day-old bank closure that has crippled the economy will continue on Tuesday and Wednesday and the daily cash machine withdrawal limit of 60 euros would be maintained. There were long lines at ATMs, where 20-euro banknotes have largely run out. In one bright spot for Greece's dismal economy, travel associations in Britain, Germany and France said tourists remain undeterred and bookings for peak season Greek vacations were strong, with no cancellations so far. ID:nL8N0ZM36E Greece's immediate fate is in the hands of the European Central Bank, which has kept Greek banks open with a trickle of emergency cash. The ECB's policymaking governing council began a conference call in late afternoon to decide how long to go on keeping Greek banks afloat. Several people familiar with ECB policy said it would probably reject a Greek request to raise a cap on emergency liquidity assistance and leave the limit unchanged, slowly tightening the noose but giving banks a few more days' air. "BRAVE CHOICE" After five years of economic crisis and mass unemployment, Greek electors voted 61.3 percent 'No' to the bailout conditions already rejected by their radical leftist government, casting Greece into the unknown. "You made a very brave choice," Tsipras said in a televised address as jubilant supporters thronged Athens' central Syntagma Square to celebrate the act of defiance of Europe's political and financial establishment. The euro slid against the dollar after the setback for Europe's monetary union, and European shares and bonds took a hit when markets opened after the weekend. But the losses were contained and there was no sign of serious contagion to other weaker euro zone sovereigns. ID:nL3N0ZL0GD Analysts with several international banks including Citi, Barclays, BNP Paribas and J.P. Morgan said a "Grexit" from the euro zone was now their most likely scenario. ID:nL3N0ZM33F British finance minister George Osborne told parliament in London: "The prospects of a happy resolution of this crisis are sadly diminishing." EU officials said it would be hard to give Greece easier terms, not least because its economy has plunged back into recession since Tsipras' Syriza party won power in January. Public finances were now in a far worse position than when the rejected bailout deal was put together. But on the streets of Athens, citizens were unrepentant at their vote. "I voted 'No' to austerity; I want this torture to end," said Katerina Sarri, 42, a mother of two running a kiosk in Athens. "I'm aware that we will suffer for years but I'm still hopeful. I need to know that there is light at the end of tunnel, that the lives of my children will be better," she said. (Additional reporting by Renee Maltezou, Deepa Babington, Lefteris Karagiorgiannis and Angeliki Koutantou in Athens, Paul Carrel and Andreas Rinke in Berlin, Julien Ponthus in Paris; Writing by Paul Taylor; Editing by Peter Graff and Giles Elgood) ((paul.taylor@thomsonreuters.com; +322 2876987; Reuters Messaging: paul.taylor.thomsonreuters.com@reuters.net)) Keywords: EUROZONE GREECE/

Tanzania jails former finance, mining ministers over gold deal

July 06, 2015 - reuters.com

DAR ES SALAAM, July 6 (Reuters) - A Tanzanian court sentenced two former ministers to three years in jail on Monday over corruption charges related to the award of a gold audit tender, according to court documents. The convictions of former Finance Minister Basil Mramba and former Energy and Minerals Minister Daniel Yona represent two of the most high-profile convictions in the government's anti-graft drive. Lawyers said the ex-ministers would appeal. Businesses have long complained that graft is a major reason for the high cost of doing business in the east African nation. Former Finance Ministry permanent secretary Gray Mgonja, who was jointly charged with the former ministers, was acquitted by the Kisutu Resident Magistrate's Court in Dar es Salaam. Court documents seen by Reuters showed the ex-ministers were accused of abusing their authority in 2002 by "arbitrarily" awarding a contract to audit gold production from Tanzania, Africa's fourth biggest producer. The court also convicted Mramba, 75, and Yona, 76, of illegally extending an audit contract for two years after its expiry in 2005, disregarding a team set up to review the deal. Mramba was also convicted of using his position as finance minister to unlawfully exempt a local subsidiary of the auditor of paying 11.75 billion Tanzanian shillings ($5.3 million) in government taxes. ($1 = 2,220.0000 Tanzanian shillings) (Reporting by Fumbuka Ng'wanakilala; Editing by Edmund Blair and Ralph Boulton) ((edmund.blair@thomsonreuters.com; +254 20 499 1232; Reuters Messaging: edmund.blair.thomsonreuters.com@thomsonreuters.net)) Keywords: TANZANIA CORRUPTION/

Fortress macro fund co-CIO Jeff Feig leaving firm-sources

July 06, 2015 - reuters.com

BOSTON, July 6 (Reuters) - Hedge fund Fortress Investment Group LLC FIG.N is reshuffling the senior ranks of its macro fund with Michael Novogratz becoming the sole chief investment officer and co-CIO Jeff Feig leaving the company, three sources with knowledge of the changes said. This marks the second time in roughly six months that the $70 billion fund company is making changes at its macro fund, which started the year off with heavy losses after being wrong-footed on its Swiss franc trade. (Reporting by Svea Herbst-Bayliss and Nishant Kumar; Editing by Jeffrey Benkoe) ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters Messaging: svea.herbst.thomsonreuters.com@reuters.net)) Keywords: HEDGEFUNDS FORTRESS/CIO

France's Sapin: it's down to Athens to make realistic proposals

July 06, 2015 - reuters.com

WARSAW, July 6 (Reuters) - The Greek government, after winning backing for its stance in Sunday's referendum, now has the capacity to submit realistic proposals in talks this week with euro zone creditors, French Finance Minister Michel Sapin said on Monday. "I think the Greek government, strong after the vote which was expressed on Sunday, is in a position to make proposals which are realistic, proposals which allow us to move forward," Sapin told reporters after meeting his German and Polish counterparts in Warsaw. "But it has to take the initiative," he said. "It is from these proposals that we will learn in which direction Greece really wants to move." He said both Athens and its euro zone partners have stated they do not want Greece to leave the single currency, but the task now was to make those declarations into reality. (Reporting by Jakub Iglewski and Pawel Sobczak; Writing by Christian Lowe; Editing by Marcin Goclowski) ((christian.lowe@thomsonreuters.com; +48 22 653 97 00; Reuters Messaging: christian.lowe.thomsonreuters.com@reuters.net)) Keywords: EUROZONE GREECE/SAPIN ATHENS

Rand falls as Greece spooks investors but losses seen contained

July 06, 2015 - reuters.com

JOHANNESBURG, July 6 (Reuters) - The South African rand fell to its weakest in nearly three weeks against the dollar on Monday as a Greek vote against further austerity fanned risk aversion, but traders and analysts said further heavy losses were unlikely this week. The rand ZAR=D3 tumbled more than 1 percent to 12.4600/dollar, a low last reached in mid June, but clawed back to 12.4045 by 1539 GMT, down 0.85 percent from Friday's New York close. South African government bonds had an easier ride during Monday's session, with the yield on debt maturing in 2026 ZAR=D3 closing half a basis point lower at 8.275 percent. Some analysts had feared a steeper slide for the rand after debt-ridden Greece voted at the weekend to reject the terms of its bailout. "What happens next is not immediately clear, but ultimately, we believe, not as material as other issues facing financial markets such as U.S. monetary policy and Chinese growth," Investec Asset Management analysts Mike Hugman and Philip Saunders said in a note. The rand has lost more than 7 percent of its value against the dollar this year as investors anticipating a rise in U.S. interest rates dumped high-yielding emerging market assets, which are perceived as carrying more risk. South Africa's persistent budget and current account deficits and, more recently, its worst electricity crunch since 2008, have rendered the rand particularly vulnerable to the sell-off. (Reporting by Stella Mapenzauswa; Editing by Susan Fenton) ((stella.mapenzauswa@thomsonreuters.com; +27 11 775 3161; Reuters Messaging: stella.mapenzauswa.thomsonreuters.com@reuters.net)) Keywords: SAFRICA MARKETS/CURRENCY

Sterling climbs as Greece strife hurts chances of 2015 U.S. rate hike

July 06, 2015 - reuters.com

By Jemima Kelly and Anirban Nag LONDON, July 6 (Reuters) - Sterling climbed against the dollar and euro on Monday after Greek voters emphatically rejected terms of a rescue package, boosting safe-haven flows into Britain's currency and making a 2015 U.S. Federal Reserve rate hike less likely. The euro showed little sense of panic selling, amid expectations the European Central Bank would take action to stabilize the market if necessary and hold emergency funding to Greek banks at the same level as last week. But the common currency, which edged up from lows after the resignation of Greek Finance Minister Yanis Varoufakis, was still a sell on rallies, traders said. FRX/ The euro was down half a percent on the day at 71.005 pence EURGBP=D4 , having fallen to a low of 70.57 pence in early trading in Asia. It was still well above last Monday's low of 69.88 pence, its weakest versus sterling in nearly eight years. "Euro/sterling has been a popular cross during the Greek crisis. There is a lot of unpredictability on how things will pan out and a lot of noise about whether there will be any debt relief or not for Greece," said Chris Turner, head of currency strategy at ING. "In any case, euro/sterling is a sell as the ECB will keep rates anchored and we expect it to fall below 70 pence." Against the dollar, sterling edged up 0.2 percent to $1.5596 GBP=D4 . Adam Myers, European head of FX strategy at Credit Agricole, said what was driving sterling against the dollar was expectations of when interest rate hikes from the U.S. Federal Reserve will come. "What does the market think is going to be the Fed's reaction given the Greek 'No'? Does it make them more or less likely to tighten in September? At the margin it's definitely got to be less," said Adam Myers, European head of FX strategy at Credit Agricole in London. "We could be in the midst of European financial contagion in the next couple of weeks' time (and) if we were there the Fed may not tighten in September, so then the dollar goes lower. The Bank of England is probably not going to change its position, so sterling/dollar goes higher." The BoE meets this week and analysts at RBC Capital said it was difficult to see even those policymakers who have sought to raise rates choosing this meeting to vote in favour of a hike so soon after the budget and with Greek uncertainty still high. Traders are also gearing up for a budget statement later this week which is likely to lead to further fiscal tightening in Britain. British government bond prices tracked German debt sharply higher in early trading following the Greek referendum result, but later gave up their gains following an upbeat survey of U.S. business activity. At 1530 GMT the 10-year gilt yield GB10YT=RR was up around a basis point on the day at 2.01 percent. (Additional reporting by Andy Bruce) ((jemima.kelly@thomsonreuters.com; +44)(0)(20 7542 7508; Reuters Messaging: jemima.kelly.thomsonreuters@reuters.net)) Keywords: MARKETS STERLING/CLOSE

UPDATE 1-Greek banks in Serbia have no liquidity or outflow problems - central bank

July 06, 2015 - reuters.com

(Adds context, details, quotes) BELGRADE, July 6 (Reuters) - The four Greek-owned banks in Serbia have no liquidity problems and have not seen any major outflows of deposits, the Serbian central bank said on Monday. "No withdrawals of assets by parent banks were recorded and no major withdrawals of savings deposits were recorded," the central bank said in an emailed statement. It said the Greek crisis was not having any major impact on the domestic foreign exchange market. By 1500 GMT the dinar was trading at 120.07 to the euro, around 0.23 percent stronger than Friday's close. Last week, Serbia's central bank moved to limit transactions by lenders whose parent banks are in Greece, in order to prevent a spillover of the Greek crisis to the Serbian banking sector. The four Greek-owned banks are Piraeus, Vojvodjanska Banka (a part of the NBG Group), Alpha and Eurobank. ID:nL5N0ZF181 Last week the central bank bought a total of 40 million euros ($44.29 million) on the interbank market to stem the dinar's gains versus the single currency, bringing total purchases this year to 430 million euros. The central bank did not intervene on the interbank market on Monday, dealers said. In the statement the central bank also said it was keeping in touch with the European Central Bank about developments involving Greek banks in order to be ready to "launch timely measures" to secure their stable operations in Serbia. ($1 = 0.9031 euros) (Reporting by Aleksandar Vasovic; Editing by Mark Trevelyan) ((aleksandar.vasovic@thomsonreuters.com; +381113044930;)) Keywords: EUROZONE GREECE/SERBIA BANKS

France's Sapin: we wait and see what Athens proposes

July 06, 2015 - reuters.com

WARSAW, July 6 (Reuters) - French Finance Minister Michel Sapin said on Monday it was too early to draw any conclusions about the proposals the Greek government will make in renewed negotiations with international creditors. "We're waiting to see what Greeks will say. The actual proposals matter," Sapin, speaking through an interpreter, said after a meeting with his Polish and German counterparts in Warsaw. "It will be hard to find an answer to this difficult situation, it lies in a strengthening of the union, of cooperation, also of the eurozone," he said. "The fact that we see problems does not mean we will succumb to those problems. The best answer to this difficult situation is further work on things we're already working on so we can move forward." (Reporting by Jakub Iglewski and Pawel Sobczak; Writing by Marcin Goclowski; Editing by Christian Lowe) ((marcin.goclowski@thomsonreuters.com; +48 22 6539724; Reuters Messaging: marcin.goclowski.reuters.com@thomsonreuters.net)) Keywords: EUROZONE GREECE/SAPIN PROPOSALS

POLONIA Rate rises 0.01 pp.

July 06, 2015 - reuters.com

WARSAW, Jul 6 (Reuters) - POLONIA the reference rate for Overnight deposits amounted to 1.51 percent. The volume of transactions concluded till 16:30 by banks participating in POLONIA fixing amounted to 1,220 mln PLN. Note: Description of reference rate at: http://www.acipolska.pl/ ((warsaw.newsroom@reuters.com))

UPDATE 1-Bank of Canada survey shows low oil price still hurts economy

July 06, 2015 - reuters.com

(Adds details on currency effect and on credit conditions) By Randall Palmer and Leah Schnurr OTTAWA, July 6 (Reuters) - Current Canadian business sentiment paints a picture of two economies, according to a Bank of Canada report on Monday, with cheap oil depressing the outlook in petroleum-related industries, but with some promising signs elsewhere. The central bank's quarterly business outlook survey showed indicators of upcoming business activity remaining low but edging up modestly, supported by a generally positive U.S. outlook. "However, sales expectations deteriorated sharply in energy-producing regions, where the oil price shock continues to weigh importantly on business sentiment," the bank said of its survey, taken from May 15 to June 10. Earlier this year, bank Governor Stephen Poloz said the effect of lower prices for oil, a major Canadian export, would be front-loaded in the first quarter, with the economy beginning to recover in the second quarter and with positive forces dominating from around midyear. But there are concerns the bank has been too optimistic in its growth forecast, and markets and the bank itself will be looking to this survey as well as other data points ahead of next week's interest rate decision. The business outlook survey said balances of opinion on investment and hiring intentions were still weak, and the number of companies reporting labor shortages restricting their ability to meet demand remained low. It also noted that many companies reported that the lower Canadian dollar was a welcome development with positive effects on sales. The weaker currency was having a mixed impact on investment decisions, causing restraint among those facing higher costs for imported machinery, but boosting plans among some exporters that are enjoying higher margins on their U.S.-dollar-denominated sales. The business outlook survey pointed to an easing of credit conditions over the past three months, but a separate survey of senior loan officers showed business-lending conditions broadly unchanged. (Reporting by Randall Palmer and Leah Schnurr; Editing by Peter Galloway) ((randall.palmer@thomsonreuters.com, Twitter @reutersPalmerR; +1-613-235-6745; Reuters Messaging: randall.palmer.thomsonreuters.com@reuters.net)) Keywords: CANADA CENBANK/

CORRECTED-Greek banks in Serbia have no liquidity or outflow problems - central bank

July 06, 2015 - reuters.com

(corrects to "by" from "from" in paragraph 2 to show Greek parent banks have not made withdrawals from operations in Serbia) BELGRADE, July 6 (Reuters) - The four Greek-owned banks in Serbia have no liquidity problems and no major outflows of deposits were recorded, the central bank said on Monday. "No withdrawals of assets by parent banks were recorded and no major withdrawals of savings deposits were recorded," the central bank said in a statement. It also said the Greek crisis had no major impact on the domestic FX market. The dinar on Monday at 1430 GMT traded at the rate of 120.05 to euro or around 0.25 percent stronger that the previous close on Friday. (Reporting by Aleksandar Vasovic; Editing by Janet Lawrence) ((aleksandar.vasovic@thomsonreuters.com; +381113044930;)) Keywords: EUROZONE GREECE/SERBIA BANKS

Ukraine inflation at 57.5 pct y/y in June - statistics service

July 06, 2015 - reuters.com

KIEV, July 6 (Reuters) - Ukrainian consumer price inflation was 57.5 percent year-on-year in June, from 58.4 percent in May, the State Statistics Service said on Monday. Prices in Ukraine will rise this year at the fastest rate since 1996 due to a slump in the national hryvnia currency and a rise in utilities prices under an IMF bailout programme, according to a Reuters monthly survey. (Reporting by Alessandra Prentice; Editing by Janet Lawrence) ((alessandra.prentice@thomsonreuters.com; +380 44 244 9150; Reuters Messaging: alessandra.prentice.reuters.com@reuters.net)) Keywords: UKRAINE CRISIS/INFLATION

"Grexit" becomes base case for many, but markets barely blink

July 06, 2015 - reuters.com

By Jamie McGeever LONDON, July 6 (Reuters) - Banks scrambled to increase the chances of Greece leaving the euro after Sunday's referendum, but euro markets only flickered and many investors doubted the `No' vote was the watershed moment some had feared. Greece's rejection of the conditions its European creditors had demanded for releasing new loans was not what markets had assumed last week. But like so many other twists and turns in this six-month standoff, the market reaction was far from black and white. The fall on Monday in the euro, euro zone blue chips and the government bonds of other southern euro zone countries such as Italy and Spain was largely within recent parameters. Traders and investors posited four possible explanations for the muted reaction. First, many investment funds believe the prospect of "Grexit" has now been so widely flagged that its shock impact is gone. Markets are largely priced to account for it and direct financial fallout from would be small anyway. Second, a sizeable number of asset managers still believe Grexit can be avoided. Third, many are convinced the European Central Bank - now armed with quantitative easing and a host of other bond-buying tools - will act swiftly and forcefully to douse any contagion. And fourth, markets are simply too complacent and are vulnerable to a bigger shock as the effects of the first euro zone member to leave the bloc become clear. "Maybe the market is more immune to contagion than we think. But it's been amazingly calm. There's effectively been no contagion at all, and I find that hard to believe," said Michael Michaelides, rates strategist at Royal Bank of Scotland. RBS was one of a clutch of banks, including JP Morgan and Barclays, to come out after the referendum and say Greece's exit from the monetary union is more likely than not. INSIDIOUS Goldman Sachs said a `No' vote, followed by a tightening of capital controls and Greece resorting to IOUs, would push 10-year Spanish and Italian yields up to around 3 percent and widen their premium over German yields to 200-250 basis points. JP Morgan and Barclays also said the spreads would widen towards 200 basis points as investors grappled with the sudden realization Grexit could actually happen. Perhaps tellingly, credit ratings firm Standard & Poor's also said it had upped its chances of Grexit but saw no direct ratings impact on other euro sovereigns. In the event, Spanish and Italian yields rose 8 basis points by late afternoon to around 2.35 percent ES10YT=RR IT10YT=RR . The spread over Germany EU10YT=RR widened to 160-165 basis points. At those levels, Spanish 10-year yields have risen more on 13 previous days this year and Italy's have risen 19. Similarly, euro zone stocks fell almost 2 percent .STOXX50E but have fallen more seven times this year. Reaction in foreign exchange was even more muted. The euro fell more than a cent below $1.10 EUR= early in Asian trading, but in afternoon trade in Europe it was down 0.7 percent. It has had 27 steeper daily losses this year. This is all the more remarkable given how seismic the prospect of "Grexit" was during the first wave of the euro zone crisis in 2011 and 2012. "Many were taking this referendum too literally," said Neil Williams, chief economist at Hermes Investment Management. "Markets have yet to be convinced in full either that the exit door will be open or that the extent of any contagion from this could be irreparably damaging to the system," he said. "Greece still needs to default and restructure in or outside the euro." Andrew Milligan, head of global strategy at Standard Life Investments, echoed that: "A `No' vote does not mean a Greek exit from the euro. A Greek exit is by no means certain." Along with expectations of ECB support, it was also critical that, unlike 2012, the rest of the euro zone economy was growing at a reasonable pace, Milligan said. Economists at JP Morgan, who now put the chances Greece will leave the euro at two in three, said in a worst-case messy Grexit, the ECB could pump an extra 1 trillion euros of bond-buying stimulus into the system on top of the 1 trillion it has already committed to. That might push the euro down as much as 10 cents. Analysts at Barclays echoed a common sentiment that financial market contagion will likely remain "limited and manageable" thanks to the ECB. But they highlight a potentially "insidious" channel of contagion if Greece leaves the euro. "It would change the nature of the currency union and would undermine the credibility of its irreversibility in the medium-term for investors in the real economy," they wrote in a note. A deal between Greece and its European creditors might be more likely after Yanis Varoufakis, Greece's controversial finance minister, resigned on Monday morning, removing a major obstacle to an agreement. In response to the referendum vote and Varoufakis's resignation, UK bookmaker Ladbrokes lengthened the odds on Greece leaving the euro zone this year to 7/4 and shortened the odds of it staying in the currency bloc to 2/5. Those odds imply a roughly 60 percent chance Greece will stay in the euro this year and a 40 percent chance of Grexit. (Reporting by Jamie McGeever; Editing by Larry King) ((jamie.mcgeever@thomsonreuters.com; +44)(0)(207 542 8510;)) Keywords: MARKETS GREECE/VOTE REACTION

FOREX-Euro slides, but off lows after Greek "No" vote

July 06, 2015 - reuters.com

(Recasts, changes byline, dateline; previous LONDON) * Euro losses limited after initial dip below $1.10 * Resignation of Greek finance minister a positive for Greece By Gertrude Chavez-Dreyfuss NEW YORK, July 6 (Reuters) - The euro tumbled across the board on Monday, but was off the lows of the day, after Greece voted to reject the conditions tied to the troubled country's debt bailout deal. The single euro zone currency dropped to a one-week low against the dollar below $1.10, and skidded to a six-week trough versus the yen immediately following the "No" outcome. Selling was also seen in other higher-yielding currencies such as the Australian dollar and emerging market currencies. The euro, however, has since stabilized in both the London and New York sessions. "The Greek government signaled willingness to cooperate in words and action. This reduces the risk of a Greek default or euro exit," said Patrik Säfvenblad, deputy chief investment officer at Harmonic Capital in London, with $1.2 billion in assets under management. "As a result, the currency markets saw a modest risk-off move." The vote leaves Greece in uncharted waters, however, risking a banking collapse that could force it out of the euro. Without more emergency funding from the European Central Bank, Greece's banks could run out of cash within days. ID:nL8N0ZL017 In mid-morning New York trading, the euro was down 0.6 percent at $1.1042 EUR= , after falling to a one-week low at $1.0970. Against the yen, the euro fell 0.5 percent to 135.45 yen EURJPY= . The euro was also down 0.4 percent versus sterling at 70.94 pence EURGBP= . Analysts said the resignation of Greek Finance Minister Yanis Varoufakis was positive news for Greece, removing an obstacle to any deal with the country's creditors. ID:nL8N0ZM1S9 The move prompted a comeback in the euro. "The euro is coming back following the initial post-referendum drop, but this belies vulnerability in days ahead," said Josh O'Byrne, currency strategist at CitiFX, in London. SWISS INTERVENTION? The safe-haven Swiss franc was flat against the euro EURCHF= , prompting talk among dealers of renewed intervention by the Swiss National Bank. The SNB, which confirmed last week it had been intervening to weaken the franc, as per its normal procedure declined to comment on Monday's speculation. ID:nL8N0ZM0T0 "This is going to be extremely messy, most divorces are," Stephen Jen, a partner at macroeconomics-focused hedge fund SLJ Macro Partners, said of the Greece situation. "But if you plot Iceland and Ireland on a GDP chart over the past few years, you can't distinguish them. When we think about Greece, we do need to keep in mind that there are different paths to recovery." (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Patrick Graham in London; Editing by Andrea Ricci) ((gertrude.chavez@thomsonreuters.com; 646-223-6322; Reuters Messaging: rm://gertrude.chavez.reuters.com@reuters.net)) Keywords: MARKETS FOREX/

UPDATE 1-Mexico's peso hits record low on Greece volatility, IPC index falls

July 06, 2015 - reuters.com

(Adds stock market fall, background on peso) MEXICO CITY, July 6 (Reuters) - Mexico's peso hit a record low on Monday, tracking global markets that have been pressured by fears of a Greek exit from the euro zone after voters in the Mediterranean nation voted against new measures proposed by its creditors. In early morning trading, the peso hit 15.8625 pesos per dollar, down 0.71 percent from Friday's close. Mexico's IPC stock index also fell after opening, losing nearly 1 percent to 44,640.93 points. Mexico's peso has fallen sharply in recent years, losing 7.42 percent so far this year, and 13.18 percent last year. The steep drop in oil prices, an expectation that the United States will soon raise interest rates, and now, continued volatility surrounding Greece's future in euro zone, have all conspired to punish the peso. (Reporting by Miguel Angel Gutierrez; Editing by Chizu Nomiyama) ((Gabriel.Stargardter@thomsonreuters.com; +52 1 55 54 55 26 49; Reuters Messaging: gabriel.stargardter.thomsonreuters.com@reuters.net)) Keywords: MEXICO PESO/

PRECIOUS-Gold falls on dollar, Greek vote fails to spark strong demand

July 06, 2015 - reuters.com

* Dollar gains vs euro, European shares down * Greece rejects bailout terms in referendum * Silver, platinum, palladium all decline (Updates prices, adds comment) By Clara Denina LONDON, July 6 (Reuters) - Gold fell on Monday as a robust dollar outweighed the impact of lower equity markets and some retail demand after Greek voters rejected the terms of a bailout package, potentially setting Athens on a path out of the euro. Official figures from a referendum on Sunday showed 61 percent of Greeks had said no to a deal that would have imposed more austerity measures on an already ravaged economy. Spot gold XAU= was down 0.2 percent at $1,165.70 an ounce by 1343 GMT, while U.S. gold futures GCcv1 were unchanged at $1,165.20 an ounce. "There has been some increase in the U.S. dollar, which is not going to help gold demand, but there is a limited downside from here because we are close to marginal costs of production," ETF Securities analyst Martin Arnold said. The metal, typically seen as an alternative investment in times of financial and economic uncertainties, rallied during Asian hours, reaching a near one-week high of $1,174.70, but failed to hold onto gains, as the dollar gained versus the euro. The single currency was weighed down by the uncertainty over Athens' financial situation and its future in the euro. European leaders called a summit for Tuesday to discuss their next move. ID:nL8N0ZL12O "There isn't the fear of a pan-European crisis, as was the case a few years ago, when you saw a rush to gold, which was already in a bull market," Macquarie analyst Matthew Turner said. Gold reached an all-time high of $1,920 in 2011, supported by euro zone sovereign debt fears and a weaker dollar. "We are now in a bear market, which is negatively impacting investors' sentiment," Turner added. "People are still not sure they need a safe haven and if they do need one, they are not sure it should be gold." The Greek vote leaves the country in uncharted waters, risking a banking collapse. Without more emergency funding from the European Central Bank, Greece's banks could run out of cash within days. ID:nL8N0ZL017 Investors were mostly still focused on expectations the Federal Reserve will raise interest rates from record lows this year, which would increase the opportunity cost of holding gold. Platinum XPT= was the weakest performer among precious metals, with a 3.1 percent fall to its lowest since March 2009 at $1,046.75 an ounce. Silver XAG= was down 0.6 percent at $15.56 an ounce and palladium XPD= fell 1.8 percent to $667.50 an ounce, close to a two-year low hit last week. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by Dale Hudson and Mark Potter) ((clara.denina@thomsonreuters.com)(+44 207 542 9420)(Reuters Messaging: clara.denina.thomsonreuters.com@reuters.net))

UPDATE 1-Moody's says Malaysia 1MDB does not pose systemic risk

July 06, 2015 - reuters.com

(Adds factors that may influence ratings) HONG KONG, July 6 (Reuters) - Malaysia's economy, its banking system and government finances are not under systemic risk from developments at state fund 1MDB, rating agency Moody's said on Monday. A Wall Street Journal (WSJ) report on Friday said investigators had traced nearly $700 million to bank accounts they believed belonged to Prime Minister Najib Razak. The prime minister has denied taking any money from state funds for personal gain. ID:nL3N0ZL06A Moody's said the rise in political friction has not affected the government's stance on fiscal reforms. Two of Malaysia's main opposition parties on Sunday demanded an emergency sitting of parliament to discuss the prime minister's future, and Malaysian stocks eased on Monday. ID:nL3N0ZM2QQ Moody's said in an emailed response to Reuters that developments related to 1MDB would affect the country's A3 rating only if they materially affected the trend of fiscal consolidation that supports its positive outlook. The agency also added that last week's media reports were not specific with regards to their sources and "not much different from a lot of the developments related to 1MDB over the past year." (Reporting by Umesh Desai; Editing by Mark Trevelyan) ((umesh.desai@thomsonreuters.com; +852-2843-6935; Reuters Messaging: umesh.desai.thomsonreuters.com@reuters.net)) Keywords: MALAYSIA 1MDB/

Funds eye 'jam tomorrow' in face of Greek ructions

July 06, 2015 - reuters.com

* Sentiment steady despite Greeks voting no to bailout * Stocks down 1 pct; peripheral spreads 10 bps wider * Fund houses advise clients take longer-term view By Simon Jessop LONDON, July 6 (Reuters) - For all the negative headlines around Greece, investors have proved resilient and even bullish on sectors from banks to peripheral debt that history suggests could be hardest hit if the situation there worsens. On Sunday, Greek voters issued a resounding 'no' to the terms of an international bailout plan, leading many to expect heightened market volatility as the country flirts with leaving the currency bloc to repair its battered economy. While the strength of the vote was a surprise - nearly two-thirds of votes have rejected the deal - market reaction on Monday was limited, with Europe's blue-chip Euro STOXX 50 .STOXX50E down just 1 percent and bond spreads in Spain, Italy and Portugal, the euro zone's other weaklings, only 10 basis points wider. ID:nL8N0ZM0IG ID:nL8N0ZM0OU For fund managers and those investment advisers offering bespoke services to the world's rich, the vote has increased uncertainty and teed up more market flux, but has yet to trigger a flood of sell orders. "Overall the response has been relatively subdued with investors wary of, rather than immediately worried about, a wider euro crisis," said Paul O'Connor, co-head of the multi-asset team at 89.4 billion pound asset manager Henderson Global Investors HGGH.L . During other stress points in the region's long-running debt battle, concerns around contagion from Greece to other markets has seen debt yields rise sharply and the stock prices of banks and others directly exposed to Greece fall. Since the onset of the crisis in 2009/2010, however, Europe has looked to shore up its banking system and moved a lot of Greek debt to public institutions, to limit any potential fallout. The chief investment office at the world's biggest wealth manager, UBS UBSN.VX , flagged the chance of a near-term sell-off in European equities, but said investors should focus on the positive long-term outlook for the region. "We believe that the ECB (European Central Bank) will be able to mitigate financial contagion from Greece if necessary. Over our 6-month tactical investment horizon, we expect the risk premium on peripheral bonds to narrow and the Eurozone equity rally to resume," said the group, which manages $2.2 trillion. With direct bets on Greek markets already sharply curtailed over the last two years as the country's debt troubles mounted - and even more so since the imposition of capital controls - the big question for most is how big an impact would any Greek exit have on other European markets. Increased market uncertainty meant that not every house was willing to remain bullish, with $84 billion French asset manager Lyxor maintaining a "slight underweight" on riskier euro zone assets. While hedge funds on Lyxor's platform were also paring back their bets, other so-called 'hot money' has gone the other way, with event-driven hedge fund Oceanwood recently raising $250 million to bet on a euro zone rebound. ID:nL5N0Z233L For Nigel Green, founder and chief executive of deVere Group which has $10 billion in assets under advice, any near-term volatility should prove a buying opportunity, especially for investors with a longer-term perspective. "With negotiations potentially taking an extended period of time, the uncertainty is likely to be protracted, meaning the sell-off and buying opportunity could also last some time - unlike last week when markets bounced back quickly." With Greece making up about 1 percent of European Union GDP and one tenth of a percent of its stock market capitalisation, Trevor Greetham, head of Multi-Asset at Royal London, said it was hard to see it having a lasting impact on world markets. "In fact, with investor sentiment towards the depressed end of the range, Greek stress may be creating a short term buying opportunity for global stocks. The fundamentals are positive. Monetary policy globally is still very loose and the drop in energy prices over the last year should underpin a continued expansion in the world economy." (Additional reporting by Sinead Cruise, Nishant Kumar and Carolyn Cohn; editing by Janet McBride) ((simon.jessop@thomsonreuters.com; +44)(0)(207 542 5052; Reuters Messaging: Reuters Messaging: simon.jessop.thomsonreuters.com@reuters.net)) Keywords: FUNDS GREECE/VOLATILITY

REFILE-WRAPUP 5-China stocks rise as Beijing's emergency moves brings some relief

July 06, 2015 - reuters.com

(Adds byline) * China stocks surge at opening, close up 2-3 pct * Gains concentrated on blue chips, small caps fall * Brokerages agree to make massive stock purchases * Market had fallen around 30 pct from mid-June peak * Beijing orchestrates halt in new share issues By Samuel Shen and Pete Sweeney SHANGHAI, July 6 (Reuters) - Chinese stocks rose on Monday, as an unprecedented series of support measures unleashed by Beijing brought some relief to a market whose headlong slide over the past three weeks had raised fears about the stability of the world's second-biggest economy. In an extraordinary weekend of policy moves, brokerages and fund managers vowed to buy massive amounts of stocks, helped by China's state-backed margin finance company, which in turn would be aided by a direct line of liquidity from the central bank. The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen closed up 2.9 percent, while the Shanghai Composite Index .SSEC gained 2.4 percent. .SS That represented a significant pullback, however, from an initial burst of euphoria that pushed both indexes up around 8 percent when trading began, raising questions about whether the rebound can be sustained. Oliver Barron, China policy research analyst at NSBO, said it wasn't just faith in the markets at stake after investors had ignored official measures to prop up equities as indexes slid around 12 percent last week. "After the market continued to fall despite myriad support measures, the government reached peak panic mode and must have worried that investors would not only lose confidence in the markets, but in the government itself," he said. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ COLUMN-China risk story just getting started ID:nL3N0ZM1QT BREAKINGVIEWS-Shares still look overvalued ID:nL3N0ZM18X ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> The rapid decline of China's previously booming stock market, which by the end of last week had fallen around 30 percent from a mid-June peak, had become a major headache for President Xi Jinping and China's top leaders, who were already struggling to avert a sharper economic slowdown. In response, China has orchestrated a halt to new share issues, with dozens of firms scrapping their IPO plans in separate but similarly worded statements over the weekend, in a tactic authorities have used before to support markets. Traders have also complained that some firms may be ducking out of the market turmoil by seeking a trading suspension, as an unusually large number of companies - about a quarter of all those listed in Shanghai and Shenzhen - have filed for a halt. ID:nL8N0ZM173 Recent falls in commodity markets, which are sensitive to expectations of Chinese demand, underline the broader fears among global investors about the strength of the economy. Shanghai copper SCFcv1 posted its steepest daily drop in 5 months on Monday, Chinese steel prices SRBcv1 are at their lowest level since the depths of the global financial crisis and iron ore .IO62-CNI=SI has fallen 17 percent since mid-June. COM/WRAP BANKS SURGE, SMALL CAPS SLUMP Monday's stock market gains were focused on blue chips, the explicit target of the stabilisation fund, particularly the big banks, with the likes of Bank of China 601988.SS , Agricultural Bank of China 601288.SS and ICBC 601398.SS all surging nearly 10 percent. In contrast the ChiNext growth board .CHINEXTC , home to some of China's giddiest small-cap valuations, fell 4.5 percent. "Whether the blue chips will calm the small caps, or the small caps will continue to unsettle the rest of the market remains to be seen," wrote Hong Hao, chief strategist of BOCOM International. Hong Kong shares fell .HSI , widening the valuation gap between the domestic "A" and Hong Kong "H" listings of Chinese firms, with foreigners net sellers through the Connect scheme that connects the Hong Kong and Shanghai exchanges. China stocks had more than doubled over the past year, despite a cooling economy and weakening corporate earnings, resulting in a market that even China's bullish securities regulators eventually admitted had become too frothy. But the slide that began in mid-June quickly showed signs of getting out of hand. A surprise interest-rate cut by the central bank at the end of June, relaxations in margin trading and other "stability measures" did little to calm investors, many of whom have borrowed heavily to play the stock market. STILL EXPENSIVE In a series of announcements on Saturday, China's top brokerages pledged to collectively buy at least 120 billion yuan ($19.3 billion) of shares to help steady the market, and said they would not sell while the Shanghai Composite Index remained below 4,500, a level last seen on June 25. Underlining scepticism beyond mainland China about the sustainability of the measures, Hong Kong listed shares of Chinese brokerages took a beating on Monday. ID:nL3N0ZM2N0 In addition, 28 companies that had been approved to launch IPOs announced they had suspended their plans. The U-turn is consistent with past IPO freezes in China when share markets were falling sharply, though they are usually spun as spontaneous company decisions, not as government directives. The aim was to signal to China's army of retail investors, who conduct around 85 percent of share transactions, that the government is standing behind the market. Analysts cautioned, however, that the latest policy moves may only bring short-term respite. "The government measures are only aimed at stabilising the market, and providing an exit for those who want to get out," said Liu Li, analyst at Shanxi Securities Co. "Theoretically, the central bank's money is unlimited, but you cannot expect the government to use public money to buy shares which are still expensive, such as ChiNext shares." (Additional reporting by Pete Sweeney in Beijing and Donny Kwok in Hong Kong; Writing by Alex Richardson; Editing by Will Waterman) Keywords: CHINA MARKETS/

Moody's: Malaysia 1MDB does not pose systemic risk to government finances

July 06, 2015 - reuters.com

HONG KONG, July 6 (Reuters) - Malaysia's economy, its banking system and government finances are not under systemic risk from developments at state fund 1MDB, rating agency Moody's said on Monday. A Wall Street Journal (WSJ) report on Friday said investigators had traced nearly $700 million to bank accounts they believed belonged to Prime Minister Najib Razak. The prime minister has denied taking any money from state funds for personal gain. ID:nL3N0ZL06A Moody's said the rise in political friction has not affected the government's stance on fiscal reforms. Two of Malaysia's main opposition parties on Sunday demanded an emergency sitting of parliament to discuss the prime minister's future and Malaysian stocks eased on Monday. ID:nL3N0ZM2QQ (Reporting by Umesh Desai; Editing by Janet Lawrence) ((umesh.desai@thomsonreuters.com; +852-2843-6935; Reuters Messaging: umesh.desai.thomsonreuters.com@reuters.net)) Keywords: MALAYSIA 1MDB/

UPDATE 1-Chile economic activity up just 0.8 percent in May, short of forecasts

July 06, 2015 - reuters.com

(Adds detail, background, market reaction) SANTIAGO, July 6 (Reuters) - Chile's economic activity rose 0.8 percent in May from the same month a year ago, much slower than expected, raising questions over the pace of economic recovery in the top copper exporter. The reading of the IMACEC economic activity index CLACTI=ECI , which encompasses about 90 percent of the economy tallied in gross domestic product figures, pointed to the worst performance since August 2014, and compared with forecasts for a 1.5 percent rise. The growth was driven by services, with manufacturing, mining and retail all contracting, the central bank said on Monday. In comparison with April, economic activity was flat on a seasonally adjusted basis. Chile's central bank has forecast overall growth of between 2.25 and 3.25 percent this year, up from a five-year low of 1.9 percent in 2014. But the fortunes of Chile are tied to demand in key copper buyer China, and poor performance in the Asian giant's property market has had a knock-on effect in the South American country. Weak data and rising unemployment in Chile may prompt the central bank to downgrade its growth forecast and return to an expansive monetary policy, after halting it in October last year. The government is expected to lower its own 2015 growth forecast for Chile later on Monday, which currently stands at 3.2 percent. In reaction to the IMACEC data, and hit also by a sell-off in copper and global market fears following the Greece referendum, the peso CLP= opened as much as 0.9 percent weaker against the dollar. (Reporting by Rosalba O'Brien; Editing by Bernadette Baum) ((rosalba.obrien@thomsonreuters.com; +56 2 23704250; Reuters Messaging: rosalba.obrien.thomsonreuters.com@reuters.net)) Keywords: CHILE ECONOMY/IMACEC

Mexico's peso hits record low on Greece volatility

July 06, 2015 - reuters.com

MEXICO CITY, July 6 (Reuters) - Mexico's peso hit a record low on Monday, tracking global markets that have been pressured by fears of a Greek exit from the euro zone after voters in the Mediterranean nation voted against new measures proposed by its creditors. In early morning trading, the peso hit 15.8625 pesos per dollar, down 0.71 percent from Friday's close. (Reporting by Miguel Angel Gutierrez; Editing by Chizu Nomiyama) ((Gabriel.Stargardter@thomsonreuters.com; +52 1 55 54 55 26 49; Reuters Messaging: gabriel.stargardter.thomsonreuters.com@reuters.net)) Keywords: MEXICO PESO/

GLOBAL MARKETS-Stocks, euro fall but no rout after Greek 'No'

July 06, 2015 - reuters.com

(Updates prices) * Europe shares fall but losses limited * Italian yield gap over Bunds up but below last week's high * U.S. stock index futures drop 0.6 percent * Asian shares suffer biggest one-day fall in two years * ECB response seen key By Nigel Stephenson LONDON, July 6 (Reuters) - Shares fell, the euro stumbled and yields on weaker euro zone economies' bonds rose after Greece overwhelmingly voted against conditions for a rescue package, but there was no rout and contagion was limited. U.S. stock index futures ESc1 SPc1 indicated Wall Street would follow European and Asian share markets lower but there have been several worse days this year for markets vulnerable to events in Greece. Analysts attributed the relatively muted reaction to expectations the European Central Bank would act to limit any damage. The ECB's governing council is holding a conference call on Monday to decide how long to keep Greek banks afloat. "The market is, rightly or wrongly, taking a great deal of credence of the fact that the ECB has many more defence mechanisms in place than it did in 2011-12," said Andrew Milligan, head of global strategy at Standard Life Investments. "Some of the measures we've seen already could be seen as a subtle signal by the ECB that it is ready to step up... This point ...is very important to the market reaction." Many traders and analysts had expected a closer result or even a 'Yes' in Sunday's referendum. In the event, more than 60 percent of those who voted rejected the conditions demanded by Greece's creditors. The euro zone blue-chip Euro STOXX 50 index .STOXX50E fell 1.8 percent, led down by a 3.2 percent fall in banks .SX7E , but it has suffered bigger falls on eight previous days in 2015. The pan-European FTSEurofirst 300 index .FTEU3 , was down just 0.7 percent by 1130 GMT. Germany's DAX .GDAXI was down 1.4 percent while Italy's FTSE MIB index .FTMIB dropped 2.8 percent. Italy, Spain and Portugal are seen as the economies most vulnerable to contagion from Greece. Some bankers said the result made it more likely Greece would leave the euro. But a poll of investors taken on Sunday by Germany's Sentix research group showed expectations of a "Grexit" in coming months unchanged from a week earlier at 50 percent. ID:nL5N0ZE0U1 "Markets have yet to be convinced in full either that the (Greek) exit door will be open or that the extent of any contagion from this could be irreparably damaging to the system," said Neil Williams, chief economist at Hermes Investment Management. Yields on Italian, Spanish and Portuguese government bonds rose between 9 and 17 basis points. German 10-year yields DE10YT=TWEB fell 6.4 bps to 0.73 percent. The yield gap between Italian and German 10-year bonds was on track for its widest close since the end of October. RUSH FROM RISK Greek bond markets have been closed since the regulator requested their suspension last week but dealers' quotes indicated two-year yields GR2YT=TWEB at 51.34 percent, the highest since the bonds were issued in July 2014. U.S. 10-year Treasury yields US10YT=RR dropped 9 bps to 2.30 percent as investors sought the safety of low-risk debt. The euro EUR= weakened throughout the European morning and was last down 0.8 to $1.1023 and 0.8 percent against the safe-haven Japanese yen EURJPY= . It has fallen more than that against the dollar on 22 days this year. It fell as low as $1.0967 in Asia before rebounding, garnering some support from the resignation of Greece's outspoken finance minister, Yanis Varoufakis. The euro's fall helped push the dollar up 0.3 percent against a basket of currencies .DXY In Asia, the rush from risk took MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS down 2.8 percent in the steepest daily drop in two years. Chinese stocks rose, however, after an unprecedented series of support measures from Beijing to halt a slide of around 30 percent since mid-June. The CSI 300 index of the largest listed companies in Shanghai and Shenzhen .CSI300 rose 2.9 percent. Japan's Nikkei .N225 shed 2.1 percent, while U.S. equity futures dropped 0.7 percent ESc1 . Brent crude oil futures LCOc1 fell more than $1.50 to $58.77 a barrel. Gold initially rose after the Greek vote, but gains fizzed out due to the dollar's relative strength. It XAU= traded at $1,165.15 an ounce. (Additional reporting by Wayne Cole in Sydney, Hideyuki Sano in Tokyo and Patrick Graham, Lionel Laurent and Alistair Smout in London; editing by John Stonestreet) ((nigel.stephenson@thomsonreuters.com; +44 20 7542 8682; Reuters Messaging: nigel.stephenson.reuters.com@reuters.net)) Keywords: MARKETS GLOBAL/

S.Africa's NUM union rejects gold wage offer - source

July 06, 2015 - reuters.com

JOHANNESBURG, July 6 (Reuters) - South Africa's National Union of Mineworkers (NUM) has rejected a wage offer from gold producers and is still pressing for pay hikes of up to around 80 percent, a union source said on Monday. Bullion producers including AngloGold Ashanti ANGJ.J , Harmony Gold HARJ.J and Sibanye Gold SGLJ.J offered increases last week of up to 13 percent. ID:nL5N0ZF3MX (Reporting by Ed Stoddard; Editing by Stella Mapenzauswa) ((Edward.Stoddard@thomsonreuters.com; +27 11 775 3160; Reuters Messaging: edward.stoddard.thomsonreuters.com@reuters.net)) Keywords: SAFRICA GOLD/WAGES

BRIEF-Caledonia Mining says gold production at Blanket mine in the first six Months of 2015 remains on track to achieve target production for 2015 Of 42,000 Ounces

July 06, 2015 - reuters.com

July 6 (Reuters) - Caledonia Mining Corp CAL.TO : * Gold production at Blanket Mine in the first six Months of 2015 remains on track to achieve target production for 2015 Of 42,000 Ounces * 10,424 Ounces of gold were produced during Q2 2015 at Blanket Mine , representing a 4.7 pct increase on the gold produced in Q1 2015 * Source text for Eikon ID:MKWH5PF6a * Further company coverage CAL.TO ((Bengaluru Newsroom; +1 646 223 8780))

BRIEF-ECR Minerals reports positive trenching results from Itogon gold project

July 06, 2015 - reuters.com

July 6 (Reuters) - Ecr Minerals Plc ECRE.L * ECR Minerals positive trenching results from Itogon gold project, Philippines * Positive results from trenching at Itogon epithermal gold project, Northern Philippines * Trenching was completed during May and June 2015 and comprised 13 trenches totalling 430.6m Source text for Eikon: ID:nBw759Bfba Further company coverage: ECRE.L ((Bengaluru Newsroon +918067491136;))

COMMODITIES-Oil, steel, base metals fall on Greek "no" vote, China market turmoil

July 06, 2015 - reuters.com

* Greeks vote "no" to bailout terms * Beijing unleashes salvo of market support measures * Steel, iron ore prices down 15 pct since June * Oil down almost 10 pct in a month SINGAPORE, July 6 (Reuters) - Most commodity prices suffered falls on Monday, compounding worries about oversupply, after Greece rejected terms for a bailout and top consumer China unleashed emergency measures over the weekend to prevent a full-blown stock market crash. Brent crude LCOc1 fell below $60 per barrel on Monday, to levels last seen in April, reacting to worries about the global economy as the euro EUR= slid on news Greeks had rejected terms for a bailout, putting in doubt its continued place in the single currency. ID:nL3N0ZL0GD O/R "As far as Greece is concerned, if we are going to see a drawn-out period of uncertainty, that may be negative for demand. But closer to hand is the possibility of a stronger U.S. dollar, which a negative for oil," said Ric Spooner, chief analyst at CMC Markets in Sydney. A strong dollar puts pressure on oil markets as it makes fuel more expensive for countries using different currencies. Adding to falls in Asia, commodities were sucked into China's market turmoil that has seen shares .CSI300 fall by as much as 30 percent since June amidst an economy that is growing at its slowest pace in a generation, despite a bounce on Monday following the emergency measures at the weekend. ID:nL3N0ZM1CK Chinese steel prices are now at their lowest since the peak of the global financial crisis in 2009, with futures SRBcv1 down 70 percent to around 2,000 yuan per tonne. Iron ore .IO62-CNI=SI - steel's main raw material - has fallen more than 15 percent since mid-June to below $55 a tonne. "Iron ore capped the biggest weekly loss since April as iron ore shipments surged (and) data showed a slowdown in China's steel industry and China's equity market fell sharply," ANZ bank said. Oil, iron ore and coal are already suffering from oversupply, with major producers like Australia (coal and iron ore), the Middle East, Russia and the United States (oil), all seeing near record output just as demand slows. Three-month copper on the London Metal Exchange CMCU3 hit its weakest since mid-March at $5,640 a tonne by 0305 GMT, down by 2 percent. But with economic uncertainty rising, gold benefited from its safe-haven status. Prices of the precious metal XAU= are up by almost 1 percent since the beginning of July to around $1,168 per ounce. "We think that the short-term uncertainty generated by the Greek vote will likely benefit gold and suspect that we could see more appreciation over the next few days. However,... lower oil prices and a stronger dollar should keep gold's advance somewhat in check," said INTL FCStone analyst Edward Meir. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ CHART-Commodity price index: http://link.reuters.com/byb25w CHART-China stock index: http://link.reuters.com/xub25w ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Henning Gloystein, Florence Tan and A. Ananthalakshmi in Singapore; Editing by Ed Davies) ((henning.gloystein@thomsonreuters.com; +65 6870 3263; Reuters Messaging: henning.gloystein.reuters.com@reuters.net)) Keywords: MARKETS COMMODITIES/

MIDEAST STOCKS - Factors to watch - July 6

July 06, 2015 - reuters.com

DUBAI, July 6 (Reuters) - Here are some factors that may affect Middle East stock markets on Monday. Reuters has not verified the press reports and does not vouch for their accuracy. INTERNATIONAL/REGIONAL * GLOBAL MARKETS-Euro, stocks hit by Greek vote; China bounces after rescue moves MKTS/GLOB * MIDEAST STOCKS-Egypt sinks as Emaar Misr listing disappoints; Gulf mixed ID:nL8N0ZL0KZ * Oil prices tumble after Greece vote, China stock market turmoil O/R * Gold gets safe-haven boost after Greeks reject bailout terms ID:nL3N0ZM087 * Saudi-led strikes kill 30 in northern Yemen, Houthis say ID:nL8N0ZL09U * Kerry urges Iran to make "hard choices", says US ready to walk ID:nL8N0ZL0IL * Iran's Zarif says differences remain in nuclear talks with major powers ID:nL8N0ZL152 * Lebanese Hezbollah and Syrian army enter rebel-held border city ID:nL8N0ZL09S * Islamic State suicide bombers strike in Iraqi refinery town ID:nL8N0ZL09V * Hamas reopens office of Gaza's only mobile phone provider ID:nL8N0ZL0AV * Malaysia's opposition demands emergency debate on PM after graft allegations ID:nL3N0ZL06A * Divided and desperate Greeks vote in referendum that may decide euro future ID:nL8N0ZL017 EGYPT * Egypt raises gas price paid to Italy's Eni and Edison -EGAS official ID:nL8N0ZL0BR * Egypt debt to foreign oil companies at $3.5 billion -official ID:nL8N0ZL05D * Egyptian pound weakens to 7.73 at official auction ID:nL8N0ZL0A1 * Egypt business activity expands in June for first time in five months -PMI ID:nL8N0ZI3DS * Egyptian army kills 63 militants in North Sinai ID:nL8N0ZL09W SAUDI ARABIA * Saudi Aramco lowers August Arab Light crude OSP to Asia ID:nS8N0ZI001 * Saudi's SAFCO proposes trimmed dividend payout ID:nD5N0Y2040 * Saudi Telecom Co to pay Q2 dividend of 1 riyals/share ID:nL8N0ZL04I * Saudi's Almarai Q2 net profit up 22.41 percent, sales growth rises ID:nL8N0ZL027 * Saudi June non-oil business growth at record low -PMI ID:nL9N0WR031 * Saudi's Riyad Bank recommends H1 2015 dividend of 35 halalas ID:nL8N0ZL026 * Saudi's SABIC unit, South Korea's SK form polyethylene project ID:nL8N0ZL022 UNITED ARAB EMIRATES * UAE non-oil business growth slows to 22-month low in June -PMI ID:nL9N0WR032 * UAE's Dana Gas says it has won favourable ruling in Kurdistan dispute ID:nL8N0ZL01H QATAR * Qatar first-quarter GDP growth 4.1 pct y/y, 3.4 pct q/q ID:nL8N0ZL0FF (Compiled by Dubai newsroom) ((dubai.newsroom@reuters.com)) Keywords: MIDEAST FACTORS/

India Morning Call-Global Markets

July 06, 2015 - reuters.com

EQUITIES TOKYO - Japan's Nikkei share average fell on Monday, with financial stocks and exporters leading the declines, after Greeks overwhelmingly rejected austerity measures demanded in return for bailout money, throwing the euro zone into turmoil. The Nikkei share average .N225 was down 1.4 percent at 20,242.79 by mid-morning, after falling to as low as 20,195.76 earlier. For a full report, click on .T - - - - HONG KONG - Hang Seng Index .HSI down 1.6 percent. For a full report, click on .HK - - - - LONDON - Britain's blue-chip share index marked its biggest weekly drop in a month on Friday, with miners slipping on a slowdown in China and banks falling after Brazil said it was investigating some global lenders' currency market activity. The index fell broadly in line with shares across Europe before a Greek referendum on Sunday on its debt terms that may decide the country's future in Europe. For a full report, click on .L - - - - NEW YORK - U.S. stocks fell slightly on Thursday after the International Monetary Fund warned Greece ahead of its Sunday referendum that it faces a huge financial hole, and mixed jobs data dampened the U.S. economic outlook. While the IMF was warning that Greece needed an extra 50 billion euros over the next three years to stay afloat, Greek Prime Minister Alexis Tsipras was urging voters to reject a bailout offer from lenders and saying he hoped to sign a new deal on Monday. For a full report, click on .N - - - - FOREIGN EXCHANGE SYDNEY - The euro fell on Monday, while the safe-haven yen rallied after Greeks voted to reject terms of a rescue package, deepening the country's financial crisis that could splinter Europe if creditors refuse further aid. The common currency skidded to a six-week low of 133.700 yen EURJPY=R , from 136.185 late on Friday. It has since halved those losses in volatile trade to stand at 134.800. For a full report, click on USD/ - - - - TREASURIES NEW YORK - US 10-year treasury futures open 0.87 percent higher after Greek vote. For a full report, click on US/ - - - - COMMODITIES GOLD SINGAPORE - Safe-haven bids pushed up gold prices on Monday after Greeks rejected terms of a bailout package, bringing more uncertainty over Athens' financial situation and its future in the euro zone. Spot gold XAU= rose 0.3 percent to $1,170.61 an ounce by 0044 GMT, after earlier jumping as much as 0.6 percent. For a full report, click on GOL/ - - - - BASE METALS MELBOURNE - London copper fell towards three-month lows on Monday on concerns over the deepening problems facing China and the euro zone economies, but the metal found some support after Beijing's emergency measures spurred a rebound in hard-hit shares. China stocks soared on Monday after Beijing enacted an unprecedented series of policy moves to support the market in a bid to prevent a full-blown stock market crash that could threaten the world's second-largest economy. For a full report, click on MET/L - - - - OIL SINGAPORE/TOKYO - Oil prices fell sharply early on Monday after Greece rejected austerity measures demanded in return for bailout money and as China rolled out an unprecedented series of steps to prevent a full-blown stock market crash. The result of the Greek referendum put in doubt its continued place in the single currency, pulling down the euro EUR= in early trading on Monday. For a full report, click on O/R (Compiled by Abhishek Vishnoi) ((abhishek.vishnoi@thomsonreuters.com)(+91 22 61807225)(Reuters Messaging: abhishek.vishnoi.thomsonreuters.com@reuters.net)) Keywords: MORNINGCALL INDIA/

MIDEAST STOCKS - Factors to watch - July 5

July 05, 2015 - reuters.com

DUBAI, July 5 (Reuters) - Here are some factors that may affect Middle East stock markets on Sunday. Reuters has not verified the press reports and does not vouch for their accuracy. INTERNATIONAL/REGIONAL * GLOBAL MARKETS-European bonds and stocks on the defensive before tight Greek vote MKTS/GLOB * MIDEAST STOCKS-Egypt slides on security fears; Gulf mixed ID:nL8N0ZI16J * Oil slides in thin trade on rising U.S. rig count O/R * Gold rebounds as dollar dips, focus on Greek vote ID:nL8N0ZJ39H * At least 25 Syrian al Qaeda members dead in mosque blast in Syria's Idlib ID:nL8N0ZJ3HZ * Saudi-led air strikes on Yemen cities kill 16 -Houthis ID:nL8N0ZJ22X * Car bombs kill 11 in Baghdad at end of Ramadan fast ID:nL8N0ZK0J5 * Despite progress in Iran nuclear talks, dispute over U.N. sanctions persists ID:nL1N0ZK07N * Saudi says wanted militant killed in exchange of fire ID:nL8N0ZK0C4 * Tunisia's president declares state of emergency after hotel attack ID:nL8N0ZK0DF * Egypt says kills 12 militants in air strikes as Sisi inspects troops ID:nL8N0ZK08T * A week after Kuwait bombing, Sunnis and Shi'ites pray together for unity ID:nL8N0ZJ246 * Middle East lenders struggle with falling loan pricing-bankers ID:nL3N0ZJ3PQ * Iran steelmakers request import duty hikes, cite cheap China steel ID:nL8N0ZJ1KS * U.N. calls on Israel, Palestinians to prosecute Gaza war crimes ID:nL8N0ZJ2KF * Gulf states tighten security for frightened Shi'ites after mosque blasts ID:nL8N0ZI2FM * U.S., allies target Islamic State in 24 air strikes in Syria, Iraq ID:nL1N0ZJ0G0 TURKEY * Turkey reinforces Syria border, PM says no incursion planned ID:nL8N0ZJ07U * Turkish June CPI falls 0.51 percent, dips more than forecast ID:nL8N0ZJ0PM * Turkish H1 automotive sales surge 50.8 percent - association ID:nI7N0YB021 * Turkish economy minister sees 2015 current account deficit $38 bln ID:nI7N0YB01Y * EXCLUSIVE-ING on course to win auction for HSBC's Turkish bank ID:nL8N0ZI48V EGYPT * Rockets land in Israel, Egypt's IS affiliate claims responsibility ID:nL8N0ZJ2SE * Israel accuses Hamas of aiding Islamic State in Egypt ID:nL8N0ZJ1TA * Egypt's GASC buys 60,000 tonnes of Romanian wheat ID:nL8N0ZI3JR * Egypt's economy grew at 3 pct in third quarter of 2014/2015 ID:nC6N0YW00C * Egypt's central bank lets pound weaken by 1.3 pct ID:nL8N0ZI1UL SAUDI ARABIA * Yemen's Houthis attack Saudi Arabia's Najran and Jizan ID:nL8N0ZJ3KR * Saudi policeman killed during security raid - SPA agency ID:nL8N0ZJ2TZ * Middle East Crude-Steady ahead of OSPs ID:nL3N0ZJ2YD * Eight dead in new Saudi-led strikes on Yemen's Sanaa ID:nL8N0ZI3Y2 * Foreign investors buy more shares in Saudi Arabia, total remains low ID:nL8N0ZI39P * Saudi economy accelerates in Q1, may not be sustained ID:nL8N0ZI20E UNITED ARAB EMIRATES * UAE conglomerate Al Jaber seeks new terms for $4.5 bln restructured debt -sources ID:nL8N0ZI2JD * UAE to finish drafting corporate tax, VAT laws this quarter ID:nL8N0ZI2AU * Dubai airport passenger traffic up 23.2 pct y/y in May ID:nL8N0ZI1EZ * BUZZ-Drake & Scull up 3.5 pct after raising ownership limit ID:nL8N0ZI0U4 * BUZZ-Abu Dhabi's TAQA drops 5.4 pct after saying no merger talks ID:nL8N0ZI0R1 KUWAIT * Asia Naphtha-Kuwait offers prompt cargo in well-supplied market ID:nL3N0ZJ3L4 * Kuwait may issue bonds to finance deficit -finance minister ID:nL8N0ZI1VT * Vietnam's Petrolimex and Kuwait Petroleum end diesel term contract -sources ID:nL3N0ZH3I6 QATAR * Qatar's QNB and Bahrain's ABC looking at Turkey's Finansbank ID:nL8N0ZI3Z4 * Qatar Navigation unit fully acquires gas carrier firms from SocGen ID:nL8N0ZI2AI * Qatar's Doha Bank raises 2 bln riyal Tier 1 capital-boosting bond ID:nL8N0ZI0TE * LNG tankers heading for Britain, Belgium, Netherlands ID:nL8N0ZJ0UW BAHRAIN * Qatar's QNB and Bahrain's ABC looking at Turkey's Finansbank ID:nL8N0ZI3Z4 YEMEN * Yemen's Houthis say Ramadan humanitarian pause under discussion ID:nL8N0ZK05C * Car bomb explodes near Yemeni mosque in downtown Sanaa, injures two people - police ID:nL8N0ZI49W * INTERVIEW-Civilians in Yemen's Aden struggle to survive fighting, shortages - Red Cross ID:nL8N0ZI3B8 (Compiled by Dubai newsroom) ((dubai.newsroom@reuters.com)) Keywords: MIDEAST FACTORS/

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