EU recession rebuffed

European Central Bank (ECB) president Jean-Claude Trichet on Friday dismissed warnings that drastic and simultaneous spending cuts planned by eurozone governments could send the 16-country bloc back into recession.

US policymakers have called for continued stimulus to keep momentum in the global recovery, while many economists and academics have raised fears that austerity measures on the cards in Athens and a clutch of other European capitals could snuff out the eurozone's nascent recovery.

"We (ECB) are totally against the view that reducing public expenditures will hinder economic growth," Trichet said at a conference organised by the Goethe University Frankfurt's Centre for Financial Studies.

"Consolidation measures will help turn the current upturn into sustained growth." - Reuters

Google's new China deal

Google said on Friday that the Chinese authorities had renewed its licence to operate a website, averting a potential shutdown of its flagship search page in the world's biggest Internet market.

Google said last week that it would stop automatically rerouting users to its uncensored Hong Kong-based search page, explaining that Beijing had indicated it would not renew its Internet Content Provider licence if it continued to do so.

That had prompted speculation that China might use the opportunity to shut down Google's China search page, which would have been a blow to its other business in the country.

Analysts said that the company's decision to stop automatically rerouting users to its Hong Kong search page showed a willingness to compromise to maintain a foothold in China, the world's largest Internet market by users.

Google stunned markets and consumers in January when it warned it might quit the country, saying it would not provide the censored search results that China requires.

In March, Google began to redirect visitors to its China website to a search site in Hong Kong that provided uncensored results. - Reuters

US to ensure liquidity

US regulators are moving quickly to tighten rules for market makers to ensure ample liquidity during stressful times.

Aiming to avoid a repeat of the stock market's "flash crash" on May 6, the US Securities and Exchange Commission (SEC) is eyeing minimum obligations for market-makers that would force them to submit quotes that are less than 10% from a stock's current price.

The flash crash, which is still unexplained, stripped the Dow Jones industrial average of some 700 points in minutes before it recovered sharply. The bounce rattled investors globally and sparked a handful of new rule proposals.

Democrats are trying to shepherd the financial reform bill through Congress so that President Barack Obama can sign it into law. The bill requires the SEC to adopt rules to supervise hedge fund advisers and the over-the-counter derivatives market. - Reuters

Bullion bounces back

Gold rose back above $1210/oz on Friday as a stock market rally showed signs of running out of steam, pointing to persistent jitters among investors, with buyers also attracted by the metal's dip to six-week lows.

The metal recovered after falling to its lowest since late May. On Wednesday, it was just above $1185/oz, but struggled to make new headway in early trade as appetite for nominally higher-risk assets like equities returned. This risk appetite later seemed to be abating, as Wall Street stocks opened a touch lower and industrial commodities, like oil, pared earlier gains.

"The overall picture I think still points to cautiousness, which is positive for gold," said David Wilson, an analyst at Société Générale.

European shares rose for a fourth session, but analysts said the relief rally may not last much longer. On the currency markets, the euro slipped off two-month highs against the dollar, with investors taking profits as strategists said its recent rally would peter out due to lingering worries about the eurozone economy.

While platinum was steady at $1519.50/oz, industrial commodities slipped after earlier gains, with oil steadying above $75 a barrel and copper retreating from session highs at $6740/ton. - Reuters