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(AFX UK Focus) 2006-06-12 14:24 GMT: German shares off intra-day lows midafternoon as Wall Street seen higher

FRANKFURT (AFX) - Shares were off intra-day lows in midafternoon trade as US stock futures pointed to a positive start on Wall Street this afternoon, though they remained in negative territory amid weakness in financial stocks and as Bayer slid after Merck upped its stake in Schering, dealers said.

At 2.56 pm, the DAX 30 index was 33.06 points or 0.61 pct lower at 5,431.02, having moved between 5,399.77 and 5,470.23 so far this session.

The MDAX was at 7,595.66, down 103.06 points or 1.34 pct, while the TecDAX was at 622.07, down 7.55 points or 1.20 pct.

The DAX futures contract was at 5,432.50, up 20.50 points or 0.38 pct, while bund futures were at 116.61, up 0.13.

The euro last traded at 1.2587 usd, against 1.2586 in midday London trade.

Financial stocks were all in the red, with commercial real estate lender Hypo Real Estate leading large-caps lower, dropping 1.04 eur or 2.29 pct to 44.45.

Let's debate cold, hard facts

Maybe our extreme weather in recent weeks will have turned more people into climate change believers. And, conversely, more people into sceptics. How can cold and wet have anything to do with global warming, the latter will protest.

The sceptics better believe. The weather is unfolding just as Niwa predicted in its climate change analysis. More violent weather patterns are a consequence of global warming. It is already taking a toll on agriculture and infrastructure.

We should be worried - a lot. Among developed countries, we are by far the most dependent on the primary sector, the economic activity most vulnerable to climate change. Overall the primary sector generates about 17 per cent of our GDP, 15 times the contribution found in most other developed countries.

$A breaks through 75 US cent mark

The Australian dollar opened stronger after breaking through the 75 US cent mark, as the US currency fell on weaker than expected US payrolls data.

At 0700 AEST the local currency was trading at $US0.7521/21, up on Friday's close of $US0.7481/85.

Over the weekend, it reached a low of $US0.7470 and a high of 0.7525.

ABN Amro Australia currency strategist Greg Gibbs said the Australian dollar was higher, while the US currency had fallen against all major currencies.

"The payrolls report on Friday night in the US was weaker than expected, so that appears to have weakened the US dollar and given the Aussie dollar a boost," he said.

The US government June employment report, which showed weaker jobs growth and rising wages, brought concerns about slower economic growth and a pickup in inflation.

The US Dollar Emerges as an Unlikely Safe Haven

Hot money flows into and out of foreign countries come in big waves. Losses in one market trigger sales in other markets. And foreign investors, who hold huge stakes in emerging markets such as Brazil, India, Russia, and South Africa, will often influence local investors, when there is a whiff of panic is in the air. If the global tightening campaign is off the mark, and leads to a hard landing, traders could continue to unload risky assets abroad for safer pastures at home.

China's Trade Surplus Probably Held Close to Record Last Month

July 10 (Bloomberg) -- China's trade surplus probably stayed close to a monthly record in June, increasing pressure on the government to let the yuan appreciate faster.

The surplus was $12.8 billion, little changed from $13 billion in May, according to the median forecast of 26 economists surveyed by Bloomberg News. That would bring the trade surplus in the first half to $59.6 billion, up 50 percent from a year earlier. Figures may be released as early as today.

China's swelling trade surplus is flooding the economy with cash, hampering government efforts to rein in lending for investment projects. Allowing the yuan to strengthen would help curb the surplus, making it easier for Premier Wen Jiabao to cool parts of the economy, economists said.

``The trade surplus is creating a huge problem in China,'' said Chris Leung, an economist at DBS Bank in Hong Kong.

Dollar holds firm in thin US trade

The dollar held firm on Monday in spite of the US posting weak economic data while most other major trading blocs unveiled strong numbers.

The greenback did hit a three-week low of $1.2822 to the euro as it emerged that the US Institute of Supply Management's purchasing managers' index fell unexpectedly in June.

However, by mid-session New York trade the dollar was essentially unchanged on the day at $1.2793 to the euro, as well as firming 0.4 per cent to Y114.87 against the yen and 0.3 per cent to $1.8415 versus sterling.

Paul Mackel, senior currencies strategist at HSBC, attributed the dollar's resilience to the absence of many traders ahead of today's Independence Day holiday, meaning the reaction to the ISM data may be delayed until tomorrow.

Marc Chandler, head of global currency research at Brown Brothers Harriman, saw the dollar's uptick as "largely corrective" following a sell-off in the wake of last week's dovish Federal Reserve statement.