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Jul 5, 2012

GATA | THE GATA DISPATCH: Thomas Pascoe: Revealed -- Why Gordon Brown sold Britain's gold at a knock-down price

Thomas Pascoe: Revealed -- Why Gordon Brown sold Britain's gold at a knock-down price

Of course all this was "revealed" by GATA and particularly gold price suppression litigator Reginald H. Howe not long after it happened a decade ago, and GATA has been repeatedly thrusting it at the Telegraph ever since then, but it's thrilling to see a mainstream news organization getting around to it even this late.
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Revealed: Why Gordon Brown Sold Britain's Gold at a Knock-Down Price
By Thomas Pascoe
The Telegraph, London
Thursday, July 5, 2012

http://blogs.telegraph.co.uk/finance/thomaspascoe/100018367/revealed-why...
A great deal of Gordon Brown's economic strategy would strike a sane man as troubling. Not a great deal was mysterious. The orgy of consumption spending, frequent extensions of the cycle over which he would "borrow to invest," proclamations of the "end of boom and bust": These are part of the armoury of modern politicians of all political hues.
One decision stands out as downright bizarre, however: the sale of the majority of Britain's gold reserves for prices between $256 and $296 an ounce, only to watch it soar so far as $1,615 per ounce today.
When Brown decided to dispose of almost 400 tonnes of gold between 1999 and 2002, he did two distinctly odd things.
First, he broke with convention and announced the sale well in advance, giving the market notice that it was shortly to be flooded and forcing down the spot price. This was apparently done in the interests of "open government" but had the effect of sending the spot price of gold to a 20-year low, as implied by basic supply and demand theory.

 Second, the Treasury elected to sell its gold via auction. Again, this broke with the standard model. The price of gold was usually determined at a morning and afternoon "fix" between representatives of big banks whose network of smaller bank clients and private orders allowed them to determine the exact price at which demand met with supply.
The auction system again frequently achieved a lower price than the equivalent fix price. The first auction saw an auction price of $10 less per ounce than was achieved at the morning fix. It also acted to depress the price of the afternoon fix which fell by nearly $4.
It seemed almost as if the Treasury was trying to achieve the lowest price possible for the public's gold. It was.
One of the most popular trading plays of the late 1990s was the carry trade, particularly the gold carry trade.
In this a bank would borrow gold from another financial institution for a set period, and pay a token sum relative to the overall value of that gold for the privilege.
Once control of the gold had been passed over, the bank would then immediately sell it for its full market value. The proceeds would be invested in an alternative product which was predicted to generate a better return over the period than gold which was enduring a spell of relative price stability, even decline.
At the end of the allotted period, the bank would sell its investment and use the proceeds to buy back the amount of gold it had originally borrowed. This gold would be returned to the lender. The borrowing bank would trouser the difference between the two prices.
This plan worked brilliantly when gold fell and the other asset -- for the bank at the heart of this case, yen-backed securities -- rose. When the prices moved the other way, the banks were in trouble.
This is what had happened on an enormous scale by early 1999. One globally significant US bank in particular is understood to have been heavily short on two tonnes of gold, enough to call into question its solvency if redemption occurred at the prevailing price.
Goldman Sachs, which is not understood to have been significantly short on gold itself, is rumoured to have approached the Treasury to explain the situation through its then head of commodities Gavyn Davies, later chairman of the BBC and married to Sue Nye, who ran Brown's private office.
Faced with the prospect of a global collapse in the banking system, the Chancellor took the decision to bail out the banks by dumping Britain's gold, forcing the price down and allowing the banks to buy back gold at a profit, thus meeting their borrowing obligations.
I spoke with Peter Hambro, chairman of Petroplavosk and a leading figure in the London gold market, late last year and asked him about the rumours above.
"I think that Mr Brown found himself in a terrible position," Hambro said.
"He was facing a problem that was a world-scale problem where a number of financial institutions had become voluntarily short of gold to the extent that it was threatening the stability of the financial system and it was obvious that something had to be done."
While the market manipulation that occurred when the gold reserves were sold was not illegal as the abuse at Barclays may have been, the moral atmosphere in which it took place was identical.
The crash which began in 2007 and endures still was the result of an abdication of responsibility across the financial sector. This abdication ranged from the consumer whose thirst for goods pushed him beyond into grave debt to a government whose lust for popularity encouraged it to do the same.
Responsibility is evaded by all bar those on whose shoulders it ought to rest. The gold panic of 1999 was expensively paid for by the British public. The one thing politicians ought to have bought with that money was a lesson in the structural restraints that needed to be placed on banks now that the principle that they were ultimately public liabilities had been established.
It was a lesson that could have acted to restrain all players in the credit market boom of the 2000s. It was a lesson nobody learnt.
-----
Thomas Pascoe worked in both the Lloyd's of London insurance market and in corporate finance before joining the Telegraph. He writes about the financial markets.

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NYT Global Update | Top News: Moving to Spur Economy, 3 Central Banks Take Action

Global Update




TOP NEWS

Moving to Spur Economy, 3 Central Banks Take Action

By KEITH BRADSHER and MELISSA EDDY
China and the euro zone cut interest rates as the Bank of England renewed its bond-buying program. The uncoordinated moves emphasized worries about a global economic slowdown.

U.S. Files Trade Complaint Against China on Vehicles

By MARK LANDLER
A complaint over duties China levied on American cars came as President Obama began a tour of the manufacturing heartland in Pennsylvania and Ohio.

NATO Supply Trucks From Pakistan Resume Trek to Afghanistan

By SALMAN MASOOD
Three trucks carrying supplies for NATO troops crossed a border post in southwestern Pakistan on Thursday, the first to do so in seven months, officials said.
Science

Video: The Cheetah Challenge

As zoos struggle to save endangered species like cheetahs, scientists are still learning the basics of breeding behavior.
Opinion

Op-Ed Contributors

Olympian Arrogance

By JULES BOYKOFF and ALAN TOMLINSON
The International Olympic Committee is elitist, domineering and crassly commercial at its core.
WORLD

National Identity at Heart of Debate on Israeli Service

By JODI RUDOREN
Among the questions roiling the political system: how many ultra-Orthodox men and Arab citizens should be drafted into the military or national service, and how should resisters be penalized?

WikiLeaks Releasing Trove of Syria Documents

By RAVI SOMAIYA
The group said the cache of more than 2.4 million e-mails between Syrian politicians, government officials and companies would embarrass President Bashar al-Assad of Syria as well as his adversaries.

U.N. Commander Says Syria Violence Is 'Unprecedented'

By ALAN COWELL
The officer commanding United Nations monitors said the fighting made it impossible for his unarmed observers to resume their mission.
BUSINESS

New Agency Plans to Make Over Mortgage Market

By EDWARD WYATT
The Consumer Financial Protection Bureau, seeking to improve fairness and clarity for borrowers, is moving to establish its legitimacy and quiet its critics.

The Gentlemen's Club That Sets Libor Is Called Into Question

By LANDON THOMAS Jr.
The scandal surrounding, Libor, or the London interbank offered rate, has shown that the traditional way of setting it, a gentlemanly query of banks, may be outdated considering the enormous influence the rate has on markets.

Spinning a Scenario of Euro Zone's Unraveling

By LANDON THOMAS Jr.
A report by Roger Bootle and economists at Capital Economics in London was the winning entry in a contest to see who could come up with the most elegant solution for how the euro zone might unravel.
TECHNOLOGY

Car-Pooling Makes a Surge on Apps and Social Media

By MICKEY MEECE
Helped by advances in technology and social networking, sharing rides is becoming easier and more popular in the United States.

Luring Online Shoppers Offline

By STEPHANIE CLIFFORD
Some big retailers are transforming their stores into extensions of their online operations, adding return centers, pickup locations and free shipping outlets.

European Parliament Rejects Anti-Piracy Treaty

By ERIC PFANNER
Opponents said the Anti-Counterfeiting Trade Agreement, designed to crack down on digital piracy, was not democratic.
SPORTS

Unraveling of Glasgow Rangers Jeopardizes Entire League

By ROB HUGHES
The Glasgow club and its neighbor, Celtic, are the soccer heavyweights in Scotland, but will broadcasters still want to pay big money if Rangers are playing in a lower-tier league because of bankruptcy?

Cricket Power India Blocking Electronic Review

By HUW RICHARDS
Cricket officials once again failed to agree on a standardized system of reviews for international matches last week, and it was clear that the sticking points are as much political as technological.
On Tennis

With Renewed Confidence, Serena Williams Looks to Win Now

By CHRISTOPHER CLAREY
After a trying year with medical issues and a French Open upset, the four-time Wimbledon champion has kicked into a familiar gear on the grass.
U.S. NEWS

Killed by Thousands, Varmint Will Never Quit

By THEO EMERY
Over the past decade, a federal eradication program has come close to eliminating the large rodents in the Delmarva Peninsula, but they have proved to be a resilient adversary.

Zimmerman Granted $1 Million Bond

By LIZETTE ALVAREZ
George Zimmerman, who is charged with second-degree murder in the killing of Trayvon Martin, was chastised by a judge as "flaunting the system."

No House Arrest for Cardinal's Aide Convicted of Endangering Children

By JON HURDLE
Msgr. William J. Lynn, first senior official in the Catholic Church in the United States convicted of covering up sexual abuses by priests under his supervision, must stay in jail awaiting sentencing.
OPINION
Op-Ed Contributor

The Latin Prize

By PETER HELLMAN
Sixty years after the Holocaust, the sister of a young scholar is still inspired by his promising life, courageous stand and sad death.
Op-Ed Columnist

Doughnuts Defeating Poverty

By NICHOLAS D. KRISTOF
A family in Malawi is a great example of how a little structured saving and entrepreneurship can change lives. Just look at what Biti Rose did with fritters.
Op-Ed Contributor

A Victory for the Internet

By CARL BILDT
The vote in the U.N. Human Rights Council was a breakthrough of fundamental importance for the Internet.

NYT Afternoon Business News: New Agency Plans to Make Over Mortgage Market

:



BUSINESS

New Agency Plans to Make Over Mortgage Market

By EDWARD WYATT
The Consumer Financial Protection Bureau, seeking to improve fairness and clarity for borrowers, is moving to establish its legitimacy and quiet its critics.

The Gentlemen's Club That Sets Libor Is Called Into Question

By LANDON THOMAS Jr.
The scandal surrounding, Libor, or the London interbank offered rate, has shown that the traditional way of setting it, a gentlemanly query of banks, may be outdated considering the enormous influence the rate has on markets.

Spinning a Scenario of Euro Zone's Unraveling

By LANDON THOMAS Jr.
A report by Roger Bootle and economists at Capital Economics in London was the winning entry in a contest to see who could come up with the most elegant solution for how the euro zone might unravel.

Retail Sales Fell Short in June

By CHRISTINE HAUSER
Some of the nation's biggest retail chains reported on Thursday that sales growth slowed in June, as consumers spent less in an economy struggling with wavering consumer confidence and unemployment.

Positive Reports on U.S. Jobs

By THE ASSOCIATED PRESS
Jobless claims fell to the lowest weekly level since mid-May, and a payroll report for June exceeded expectations.

MarkettWatch | Personal Finance Daily: 10 keys to financial independence in retirement



By MarketWatch
Don’t miss these top stories:
Are you on track to stash away 11 times your annual salary for retirement? That’s just one step to being a financially independent retiree, according to MarketWatch columnist Robert Powell. Read his story today for nine other steps to financial freedom.
Avoiding prepaid cards might be another key money decision. As Jennifer Waters writes in her Consumer Confidential column, these cards may be convenient in some cases, but their fees are many and varied, making them a bad choice for many consumers.
Andrea Coombes , Personal Finance editor

Why prepaid cards aren’t for everyone

The fast growth of prepaid cards might make you think you’re missing something. But the wide range of fees and features can limit these cards’ use and, in some cases, make them downright wrong for some consumers.
Why prepaid cards aren’t for everyone.

10 keys to financial independence in retirement

It’s easy for a country to celebrate a day of independence. There’s a clear marker—for the U.S., it’s July 4. But it isn’t so easy for average Americans to celebrate a day of financial independence. There’s not one marker, but many. What’s more, the markers vary from person to person, writes Robert Powell.
10 keys to financial independence in retirement.

5 banned foods, from foie gras to certain beers

As some Californians lament the loss of foie gras from upscale restaurants across the state, here are five other foods you may not see on the menu—including high-alcohol beer—depending on where you live and travel.
5 banned foods, from foie gras to certain beers.

ECONOMY & POLITICS

Service sector weakest since January 2010

In another signal of a deteriorating U.S. economy, the ISM index shows this part of the economy grew at the slowest pace since January 2010.
Service sector weakest since January 2010.

Private-sector payrolls pick up in June, ADP says

A pickup in private-payroll expansion in June suggests U.S. unemployment may have declined, according to a survey based on a sampling of payrolls handled by Automatic Data Processing.
Private-sector payrolls pick up in June, ADP says.

U.S. jobless claims fall 14,000 to 374,000

First-time filings for unemployment benefits fall to lowest in six weeks, Labor data show, but the picture remains one of an economy mired in mediocre hiring trends.
U.S. jobless claims fall 14,000 to 374,000. 
 
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DealBooK | DealB%K Afternoon Edition: Attention Turns to Barclays' Future


Thursday, July 5, 2012
TOP STORY
Attention Turns to Barclays' Future A day after the former chief executive of Barclays testified to a British parliamentary committee, the credit ratings agencies Standard & Poor's and Moody's have placed the bank's rating on a negative outlook.
Libor's Moment in the Limelight While the scandal over the manipulation of interest rates may not seem like great material for the talk of a nation, it has inspired Internet wits, comedians, protesters and the press to take aim at Barclays.
  • DEALBOOK »
  •  
  • DEALBOOK HIGHLIGHTS
    Deal Professor: The Strange Takeover Limbo of CVR Steven M. Davidoff says that the remaining public shareholders of CVR are discovering that they are in a strange sort of limbo as a result of the peace treaty the energy company's former board entered into with Carl C. Icahn.
    S.E.C. Names Director of Investment Management The Securities and Exchange Commission on Thursday named Norman B. Champ III, a former hedge fund general counsel, as its director of investment management.
    Big Shareholder Vows to Fight J. Alexander's Merger Plan Privet Fund Management seeks a special meeting of the restaurant operator's shareholders.
    Walgreen, on a Buying Binge, Announces Another Deal Walgreen says it will pay about $438 million for a collection of 144. drugstores, mostly in the South that operate under the brands USA Drug, Super D Drug, May's Drug, Med-X and Drug Warehouse.
    Bayou Award Against Goldman Is Upheld An appeals court panel has upheld a $20.5 million arbitration award to creditors of the Bayou Group, who had accused Goldman Sachs of helping the hedge fund perpetrate a Ponzi scheme.
    Volkswagen to Buy Remaining Stake in Porsche The German automaker Volkswagen has agreed to buy the 50.1 percent stake in Porsche that it does not already own for $5.58 billion.
    BUZZ TRACKER
    News Analysis: Club That Sets Libor Is Called Into Question Landon Thomas Jr. explains that the traditional way of setting Libor, a gentlemanly query of banks, may be outdated considering the enormous influence the rate has on markets.
    Jon Corzine, Down and Out in East Hampton The former MF Global chief executive's social calendar is noticeably bare, according to The New York Post. "He's certainly not getting the invitations that he would have gotten before," an unidentified friend of Mr. Corzine's told The Post.
    Putting the 'Lie' in Libor |Simon Johnson, a professor at the M.I.T. Sloan School of Management, writes for the Economix blog that the scandal over rate-manipulation at Barclays can be summarized with a phrase coined by Dennis Kelleher of the financial reform advocacy group Better Markets: "Lie More," instead of Libor.
    LOOKING AHEAD
    Economic Reports Data released on Friday will include unemployment for June.
    International Negotiators from nine Pacific Rim countries, including the United States, are meeting through July 10 on the latest round of talks on a trade pact in San Diego, Calif.
    DealBook Video
    Business Day Live: Europe Drops Lending Rates
    Business Day Live: Europe Drops Lending Rates Approaching a zero interest-rate world. | Spreading the blame in the Barclays scandal.

     
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Stocks and Markets in the News | Wall Street at Close: U.S. stocks slip on services data, rate cuts, MarketWatch


Traders work on the floor of the New York Stock Exchange in New York, June 7, 2012. U.S. stocks jumped at the open on Thursday after China's central bank cut bank lending and deposit rates, fueling hopes of simultaneous action to aid a flagging global economy. REUTERS/Keith Bedford (UNITED STATES - Tags: BUSINESS) - Reuters
U.S. stocks slip on services data, rate cuts Major indexes bounce back from session lows as investors digest a poor services-sector report and worry about global growth, underlined by three central banks’ moves to ease lending barriers.

BIV Today´s Business News: Canadian rules impede Chinese investment in resources: conference board





Asia Pacific

Chinese yuan

Canadian rules impede Chinese investment in resources: conference board

Canada’s review process for foreign direct investment (FDI) discourages Chinese investments in Canadian resource industries, according to a report issued this morning by the Conference Board of Canada.

Economy and Finance

 

Fraser Institute pitches B.C. tax reform

B.C. should consider exempting all business inputs from PST, among other tax reforms, if it wants to avoid negative economic impacts from losing the HST.

Law

BCSC finds Brookmount and two directors broke securities laws

A British Columbia Securities Commission panel has found that a company quoted on the US OTC Bulletin Board and two of its directors contravened securities laws when the company issued false news releases.

Hospitality and Tourism

   

B.C. and Canadian tourism to get boost: conference board

B.C.’s tourism sector will get a boost from an increasing number of Chinese tourists thanks to China granting Canada approved destination status (ADS), according to a July 4 Conference Board of Canada report.

Rocky Mountaineer expands service to U.S.

A 13-month lockout of 109 onboard attendants is not keeping Rocky Mountaineer from expanding its service offerings.

Real Estate

Metro Vancouver edges closer to buyer’s market

Metro Vancouver’s housing market continues to edge toward a buyer’s market, according to data released July 4 by the Real Estate Board of Greater Vancouver.


ADVFN III World Daily Markets Bulletin


ADVFN III World Daily Markets Bulletin  
Daily world financial news


US Market Reports
Stocks Regain Ground After Seeing Early Weakness
After moving to the downside in early trading on Thursday, stocks have regained some ground over the course of the morning. The major averages have bounced well off their worst levels of the day, with the Nasdaq climbing back near the unchanged line.
The early weakness on Wall Street came as some traders cashed in on the recent strength in the markets, which drove the major averages to their best closing levels in over a month on Tuesday.
Traders also seemed unimpressed with interest rate cuts by the European Central Bank and the People's Bank of China as well as news that the Bank of England increased the size of its asset purchase plan.
Nonetheless, selling pressure was relatively subdued on the heels of some upbeat U.S. employment data, including a report from ADP showing stronger than expected private sector job growth and a Labor Department report showing an unexpected drop in weekly jobless claims.
Despite the subsequent recovery attempt by the broader markets, notable weakness remains visible among financial stocks. The KBW Bank Index and the NYSE Arca Broker/Dealer Index are down by 1.3 percent and 1.4 percent, respectively.
While semiconductor, oil, and telecom stocks also continue to see some weakness on the day, most of the major sectors are showing only modest moves.
The major averages are currently posting modest losses, with the Nasdaq down just 0.33 points or less than a tenth of a percent at 2,975.75. The Dow is down 42.80 points or 0.3 percent at 12,901.02 and the S&P 500 is down 5.41 points or 0.4 percent at 1,368.61.


Canadian Market Report
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TSX May Struggle To Extend Gains At Open - Canadian Commentary
Canadian stocks may struggle to extend gains at open Thursday amid mixed cues from the commodities and equity markets. While Asian markets ended mixed overnight, European shares were swinging between gains and losses even after the European Central Bank lowered interest rates below 1 percent for the first time, to support the sagging euro zone economy.
U.S. stock futures were pointing to a marginally higher open.
On Wednesday, the S&P/TSX Composite Index extended gains for a sixth session, adding 65.12 points or 0.56 percent to 11,913.87.
The price of Crude oil was moving lower Thursday morning even after China cuts bank reserve requirement ratio, which could help energy demand revive. Meanwhile, the ECB lowered interest rates to support economic growth. Crude for August lost $0.84 to $86.82 a barrel.
The price of gold slipped Thursday morning as the U.S. dollar was steady after the release of the private sector employment report. gold for August shed $23.10 to $1,598.70 an ounce.
In corporate news from Canada, simulation tools and equipments company CAE Inc. (CAE.TO) said it received orders worth C$50 million from Kunming Aviation Safety Training Centre in China and Air Canada.
Financial services company Tricon Capital Group Inc. (TCN.TO) said that on June 27, David Berman, the company's Chairman and Chief Executive Officer, indirectly acquired control or direction over an aggregate of 15,800 common shares of Tricon.
Oil and gas industry services provider Enseco Energy Services (ENS.V) swung to profit in fourth quarter, reporting pre-tax profit of C$2.4 million or C$0.11 per share compared to a loss of C$1.5 million or C$0.08 per share in the year-earlier quarter.
Metals and mining company Dia Bras Exploration Inc. (DIB.V) said it would acquire all the outstanding shares of Plexmar Resources Inc. (PLE.V) at a price of $0.01 per share, payable in cash.
In economic news from the U.S., the Automatic Data Processing said the private sector added 176,000 jobs in June following an upwardly revised increase of 136,000 jobs in May. Economists had expected private sector employment to increase by about 95,000 jobs compared to the increase of 133,000 jobs originally reported for the previous month.
Separately, the Labor Department said new unemployment claims fell more than expected for the final week of June. The claims fell 14,000 to 374,000 from the previous week's revised figure of 388,000 Elsewhere, the Bank of England left its interest rate unchanged at 0.50 percent, while raising bond purchase program by GBP 50 billion to GBP 375 billion, as widely expected.
Meanwhile, the European Central Bank cut its benchmark interest rate to below one percent for the first time in its existence. The main refinancing rate was cut by a quarter-point to 0.75 percent. The move was in line with economists' expectations.

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European Markets Turned Negative Despite Further Stimulus Measures
The European markets have finished Thursday's session largely in negative territory, despite the actions taken by both the European Central Bank and the Bank of England. The further stimulus provided by both banks was overshadowed by comments made by ECB President Mario Draghi.
The markets have been rallying in the last few days in anticipation of the announcements from the policy meetings of the ECB and the BoE. Markets across Europe got off to a positive start on Thursday, but reversed direction after the bank decisions were announced. The return of the U.S. markets in the afternoon, following the Independence Day holiday, provided no relief. The U.S. stock markets got off to a weak start due to some disappointing same store sales results.
The European Central Bank announced a historic interest rate cut on Thursday in an attempt to shore up the 17-nation economy that is slipping into recession. At its meeting in Frankfurt, the Governing Council led by ECB President Draghi reduced the main refinancing rate by 25 basis points to 0.75 percent. The move was in line with economists' expectations.
Further, the central bank also lowered its deposit rate by 25 basis points to zero. The marginal lending facility rate was also slashed to 1.50 percent from 1.75 percent, implying a narrowing of the interest corridor.
"Inflationary pressure over the policy-relevant horizon has been dampened further as some of the previously identified downside risks to the euro area growth outlook have materialized," Mario Draghi said in his introductory statement at the post-decision press conference in Frankfurt. "The underlying pace of monetary expansion remains subdued."
Citing indicators, he said there was renewed weakening of growth in the second quarter and heightened uncertainty. "Looking beyond the short term we expect the euro area economy to recover gradually, although with momentum dampened by a number of factors," he added. "The risks surrounding the economic outlook for the euro area continue to be on the downside."
UK policymakers decided to relaunch monetary stimulus in hopes of giving the recession-hit economy a jump start. The Bank of England had temporarily halted their quantitative easing programme back in May, but with inflation in check and the European economy teetering, the nine-member Monetary Policy Committee decided to raise the size of its asset purchase plan by GBP 50 billion to GBP 375 billion.
At the end of two-day meeting, the committee today left the interest rate unchanged at 0.50 percent as widely expected by economist. The rate has been maintained at the current level since March 2009.
China reduced its interest rates for the second time this year in a bid to support the economy that is showing increasing signs of slowing growth. The People's Bank of China said in a statement on Thursday that it was lowering the one-year deposit rate by 25 basis points. The one-year lending rate was reduced by 31 basis points.
The latest reduction comes just a month after the central bank announced its first rate cut since late 2008. On June 7, the PBoC reduced the one-year deposit rate to 3.25 percent from 3.50 percent. The one-year loan rate was cut by a quarter point to 6.31 percent.
France saw its 10-year borrowing costs rise at an auction on Thursday and raised slightly less than the maximum amount planned. The rising borrowing costs indicate that markets remain doubtful over the prospects of the currency bloc even after EU leaders struck a crucial deal last week.
Spain raised the maximum amount at a debt auction on Thursday, but the yield on the 10-year benchmark bond increased. The Spanish Treasury raised a total EUR 3 billion, which met the top end of the EUR 2 billion - EUR 3 billion target set for the sale. It was the first Spanish debt auction after the EU summit last week. The agency placed EUR 747 million of its 5.85 percent January 2022 bond to yield 6.430 percent, which was higher than the 6.044 percent paid at the previous sale on June 7.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 1.14 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, gained 0.07 percent.
The DAX of Germany fell by 0.45 percent and the CAC 40 of France finished lower by 1.17 percent. The FTSE 100 of the U.K. increased by 0.21 percent and the SMI of Switzerland gained 0.02 percent.
In Frankfurt, Volkswagen increased by 5.00 percent. The company agreed on a plan with Porsche for the accelerated creation of an integrated automotive group between the two companies. The move is expected take effect as of August 1, 2012.
In Paris, Air Liquide fell by 0.86 percent. The company said it has recently strengthened its position with each of the flat panel market innovation segments, signing multiple contracts and enlarging its gases & services offer.
In London Barclays climbed by 1.30 percent. Moody's Investors Service changed its outlook on the bank's financial strength rating to "negative" from "stable".
Shares of Xstrata Plc rose by 2.95 percent. The company said it has obtained the permission of the Court to adjourn the Court meeting that has been proposed to approve a scheme of arrangement in respect of the recommended all-share merger of equals with Glencore International Plc. Shares of Glencore finished higher by 1.46 percent.
Germany's construction sector continued to shrink in June due to the ongoing weakness in incoming new orders, Markit Economics said Thursday. Although the seasonally adjusted Construction Purchasing Managers' Index rose to 46 from 44.7 in May, the reading suggests contraction in the sector.
Germany's factory orders grew unexpectedly by 0.6 percent in May from a month ago, the Federal Ministry of Economy and Technology said Thursday. Economists were expecting orders to remain flat after easing 1.4 percent in April.
New unemployment claims fell more than expected for the final week of June, according to figures released Thursday by the Labor Department. The DOL calculated that there were a seasonally adjusted 374,000 new claims for unemployment for the week ending June 30.
That marks a notable drop of 14,000 from the previous week's revised figure of 388,000 and comes in well below the 386,000 level predicted by most economists. The previous week's figure was revised up slightly from the 386,000 initially reported.
Private sector employment in the U.S. increased by much more than expected in the month of June, according to a report released by payroll processor Automatic Data Processing (ADP) on Thursday, with the data offsetting recent concerns about the strength of the labor market.
ADP said the private sector added 176,000 jobs in June following an upwardly revised increase of 136,000 jobs in May. Economists had expected private sector employment to increase by about 95,000 jobs compared to the increase of 133,000 jobs originally reported for the previous month.
While the Institute for Supply Management's monthly report on activity in the service sector showed continued growth in the sector in the month of June, the pace of growth slowed by more than economists had been anticipating.
The ISM said its non-manufacturing index fell to 52.1 in June from 53.7 in May, although a reading above 50 indicates continued growth in the service sector. Economists had been expecting the index to edge down to 53.0.

Asia Market Reports
Asian Stocks Mixed Ahead Of ECB Meeting
Asian stocks moved in a tight range before ending mixed on Thursday, as reports showing shrinking services and manufacturing output in the euro area for a fifth month in June fueled concerns that the economic downturn is deepening. Amid a lack of trading cues from the U.S. markets, investors remained cautiously optimistic about the European Central Bank and Bank of England's policy meetings later today before the U.S. jobs report is released tomorrow.
The ECB is widely expected to lower interest rates to a record low, but investors are looking for some additional monetary measures such as bond purchases by the ECB to boost the ailing economy. The Bank of England's Monetary Policy Committee is also widely expected to boost its quantitative easing program by another 50 billion pounds to 375 billion pounds to prevent the British economy from sinking deeper into recession.
Commodities traded mixed and the euro consolidated the previous session's losses as growth concerns overshadowed hopes of fresh stimulus from major central banks, including the U.S. Federal Reserve.
Tokyo stocks fell in thin trading, dragged down by profit taking in the absence of major cues from the U.S. markets. The Nikkei average as well as the broader Topix index fell about 0.3 percent each. Real estate stocks like Mitsui Fudosan, Mitsubishi Estate and Sumitomo Realty & Development fell about 2 percent each after data from industry research firm Miki Shoji showed vacancy rates in the central Tokya area rose to a record 9.43 percent in June.
Softbank tumbled 4 percent on profit taking after gaining in five of the last seven sessions. Battery maker GS Yuasa lost 4 percent on a brokerage downgrade. Oil firms Inpex and JX Holdings fell 1.2 percent and 1.7 percent, respectively, following the previous session's sharp gains.
China's Shanghai Composite index fell 1.2 percent, with cyclical stocks pacing the declines on concerns over weakening domestic growth. Also, with property prices rallying in June after nine consecutive months of declines, speculation grew that the government would not ease further curbs on the property market. Hong Kong's Hang Seng index rose half a percent, although trading volumes remained low due to the Independence Day holiday in the U.S. overnight.
Australian shares slipped marginally in light trading, as investors awaited policy meetings of the European Central Bank and Bank of England. The benchmark S&P/ASX 200 dropped 0.07 percent to 4,169, while the broader All Ordinaries index ended down 0.09 percent at 4,210. Oil and gas companies were among the prominent decliners, with Linc Energy and Beach Energy losing about 4 percent each, while Woodside Petroleum slipped 0.7 percent and Oil Search declined 1.6 percent.
Miners also gave up some ground, with BHP Billiton and Rio Tinto losing less than half a percent each, while smaller rival Fortescue fell 2.4 percent. Atlas Iron dropped half a percent after officially declaring that it would not be required to pay the federal government's mining tax in the foreseeable future. Financial stocks gained ground, with the big four banks gaining between 0.1 percent and one percent.
In economic news, a report from the Australian Bureau of Statistics revealed that the nation's trade deficit widened to a seasonally adjusted $285 million in May from $26 million in April, revised from $203 million.
Seoul shares rose marginally, with the benchmark Kospi averaging gaining 0.06 percent as investors adopted a cautious stance ahead of the ECB rate-setting meeting. Samsung Electronics slipped half a percent ahead of its guidance release and Hyundai Motor, South Korea's largest automaker, ended 0.9 percent lower, while chemical company LG Chem rallied 3.6 percent.
Halla Climate Control climbed 11.6 percent after U.S. auto parts maker Visteon Corp. announced a tender offer to buy the remaining 30 percent stake of the company that it does not already own for 913 billion Korean won. Lotte Shopping rose 2.4 percent after it was named as the preferred bidder to buy electronics appliance retailer Himart.
New Zealand shares rose marginally amid light trading volumes in the absence of definite leads from offshore markets overnight. The benchmark NZX-50 index rose 0.03 percent or 1.08 points to 3,484.
Outdoor clothing and equipment company Kathmandu Holdings led the gainers on the exchange, climbing 4.3 percent after Australia's retail sales data for May released yesterday outpaced expectations. NZX rose 2.2 percent after the stock exchange operator said it would adopt a gender diversity rule for listed companies subject to Financial Markets Authority approval.
Pay TV operator Sky Network Television gained 2.1 percent and Nuplex, the maker and distributor of resins and polymers for the paint, paper and textile industries, added 0.8 percent, while Pyne Gould Corporation was unchanged following a report that it will relocate to the ASX and divest its subsidiary Perpetual Trust. The company said the report was based on a leaked email.
Elsewhere, India's benchmark Sensex was last trading up 0.4 percent, Malaysia's KLSE Composite edged up marginally and Singapore's Straits Times was gaining 0.8 percent, while Indonesia's Jakarta Composite index slipped 0.2 percent and the Taiwan Weighted average lost half a percent.

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Dollar Slightly Weaker Against Euro Ahead Of Rate Decision
The dollar is trading mixed versus its major rivals on Tuesday. The European Central Bank and the Bank of England are both expected to announce their decisions regarding interest rates following their respective meetings on Thursday. Speculation is running high that we will see a reduction in rates.
Trading volumes have been down on Tuesday, due to the holiday shortened trading session. Wednesday's Fourth of July holiday will likely further reduce trading volume, with a full close of the American markets.
U.S factory orders posted a stronger than expected rebound in May, buoyed by orders for ships, boats and aircraft, according to figures released Tuesday by the Commerce Department. New orders for manufactured goods at came in at $469.0 billion, a 0.7 percent increase that partially reverses two consecutive months of declines.
Although the April level of factory orders was revised down to show a 0.7 percent decline compared to the 0.6 percent decrease initially reported, the May increase comes in significantly strong than the 0.1 percent growth predicted by most economists.
The dollar had been holding steady in comparison to the Euro, around the $1.2575 level, but has since fallen to around $1.2625.
Eurozone producer price inflation eased to the lowest level in more than two years in May, as inflationary pressures continue to recede amid sluggish economic performance, the latest data from the Eurostat showed Tuesday.
The producer price inflation in the domestic market eased to 2.3 percent in May from 2.6 percent in April. This is the weakest rate since March 2010. Economists had forecast inflation to fall to 2.5 percent. The Eurozone producer price index fell 0.5 percent, following a 0.1 percent gain in the preceding month.
The greenback has been holding steady compared to the pound sterling since Friday, hovering around $1.5680.
British construction output declined at the sharpest pace in two-an-a-half years in June, a survey by Markit Economics found Tuesday. The Markit/CIPS Construction Purchasing Managers' Index fell to 48.2 in June from 54.4 in May.
Confidence among British business firms remained still lower than levels seen before the recession in 2007 constrained by weak domestic demand, the British Chambers of Commerce said Tuesday in its latest Quarterly Economic Survey.
"While domestic growth continues to bump along the bottom, the silver lining is an increase in firms looking for export opportunities, and in many cases, with countries outside Europe," BCC Director-General John Longworth said. "Growth cannot wait. The government must take an imaginative and brave approach to stimulating the economy and helping businesses thrive," he added.