PBOC moves to soothe markets over liquidity

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PBOC moves to soothe markets over liquidity. Chinese shares (FXI) staged a major recovery from an earlier pounding to close a mere -0.2% following speculation that the People's Bank of China would raise the white flag to China's "feral hogs" over its tough liquidity stance, which had caused short-term lending rates to go haywire. While the rumors proved to be a little enthusiastic, PBOC official Ling Tao did say the bank will guide rates to a "reasonable range" and be flexible in managing liquidity.

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Markets recover some poise after global rout. It's not only Chinese shares that have been soothed by a central bank today, U.S. stock futures and European shares have also risen, while bond markets have been fairly tame. The comments from the PBOC's Ling Tao added to dovish remarks from Fed officials yesterday, while the ECB's Benoit Coeure joined the chorus by saying that the bank's exit from its accommodative policy is still far off.

Microsoft, Oracle announce software partnership. Oracle (ORCL) and Microsoft (MSFT) have made their partnership official, with Oracle's database software to not only "receive full support" from the company when running on Microsoft's Windows Azure cloud app/infrastructure platform, but also when used with the latter's Hyper-V virtualization platform. The deal could intensify the competitive pressure on VMware (VMW) and IBM (IBM) offerings.

Top Stock News
EP Energy eyes IPO just a year after buyout. EP Energy, the oil and gas company bought just last year by a private-equity consortium led by Apollo (APO) for $7.15B, has reportedly asked several investment banks to draw up plans for a possible IPO as soon as this year. EP Energy, originally El Paso Corp.'s exploration and production arm, could be valued at over $8B in the listing.

Generic drugs industry wins major victory in Supreme Court. The Supreme Court yesterday ruled that patients can't sue firms over copycat drugs that are allegedly unsafe in a verdict that represents a major victory for generic pharmaceutical companies. The court quashed a New Hampshire jury's decision to award $21M to a woman who developed a debilitating skin disease after she took a generic version of the pain treatment sulindac made by a unit of India's Sun Pharmaceutical.

Tapes show how bank execs brought Ireland to its knees. Tape recordings show how executives at doomed Anglo Irish Bank (AIB) misled Ireland's government about how much was needed to save the firm during the financial crisis in 2008. AIB asked for €7B even though the bank knew it needed much more, with the idea being that once the government had "got skin in the game" it would have to keep providing more cash. It was bank rescues such as this one that brought Ireland to its knees.

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Top Economic & Other News
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China's Beige Book highlights lending disparity. The proportion of Chinese banks that increased lending to businesses has risen to 45% in Q2 from 35% in Q1, China's Beige Book shows, but at the same time, the number of companies applying for loans has fallen to 38% from 51%. The disparity helps explain last week's spike in short-term borrowing costs and indicates that "credit appears to be concentrated on a few borrowers."