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LATEST ECONOMIC FIGURES TAKE FIZZ OUT OF RALLIES

Financial markets saw a marked increase in risk aversion yesterday as a batch of economic reports suggested recent optimism about a global recovery might have been premature.

Equity and credit markets came under further pressure as investors headed for the perceived safety of government bonds, gold and the dollar.

However, further encouraging signs came from the money markets as the spread between interbank lending rates and Overnight Index Swap rates – a key measure of credit risk – held below levels last seen before the collapse of Lehman Brothers last autumn.

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