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LONDON, Sept 21 (Reuters) – Europe’s problems in sourcing oil and gas this winter after a dispute with Russia may be exacerbated by a new crisis in the market where prices are already red-hot: a liquidity crunch that could send them spiralling higher still.

But European governments have only belatedly rallied to offer financial support to power providers on the brink of collapse, in an effort to ease pressure on a market whose smooth operation is vital to keep people warm.

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Stocks Sink, Havens Sought As Russia Worries Combine With Fed Jitters

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TOKYO, Sept 21 (Reuters) – Stock markets fell and havens including U.S. Treasuries and the Japanese yen saw demand as Russian President Vladimir Putin’s announcement of a partial military mobilisation hurt sentiment in a market already jittery about aggressive Federal Reserve policy tightening.

European equity markets were set to fall at the open with EuroStoxx50 futures dropping as much as 1% to their lowest level since mid-July.

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Euro Falls, Safe-Haven Bonds Rally On Putin Comments

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LONDON, Sept 21 (Reuters) – The euro fell and safe-haven bond markets in the euro area rallied on Wednesday, after Russian President Vladimir Putin accused the West of engaging in nuclear blackmail against Russia.

The euro fell to as low $0.9885 and was last down 0.7% on the day.

Safe-haven bonds rallied, pushing yields down. The two-year German bond yield was last down 7 basis points on the day at 1.66% .

In a speech announcing a partial mobilisation for the country’s military campaign in Ukraine, Putin also said that Russia had “lots of weapons to reply” to what he called Western threats and said that he was not bluffing.

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European Business Group Warns Of Loss Of Confidence In China

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SHANGHAI, Sept 21 (Reuters) – A top European industry group warned on Wednesday that firms were losing confidence in China and that its standing as an investment destination was being eroded, citing its “inflexible and inconsistently implemented” COVID policy as a key factor.

The European Chamber of Commerce published the warnings in a paper it said had input from 1,800 member companies, which also contained 967 recommendations for China, the European Union and European companies related to doing business in the country.

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Rate Hikes, Ukraine War, China Woes Dim Asia Growth Outlook

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MANILA, Sept 21 (Reuters) – The Asian Development Bank (ADB) on Wednesday cut its growth forecasts for developing Asia for 2022 and 2023 amid mounting risks from increased central bank monetary tightening, the fallout from the war in Ukraine and COVID-19 lockdowns in China.

The ADB now expects the area’s combined economy, which includes China and India, to grow 4.3% this year, after previously trimming the forecast to 4.6% in July from 5.2% in April.

Full coverage: REUTERS