US wholesale inventories rose by 0.8pct in July, slightly above forecasts, and compared with a 0.6pct rise in June. Meanwhile China´s trade surplus narrowed to US$17.8bn with imports up 30.2pct on a year earlier with exports up 24.5pct.

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Group of Seven finance ministers, meeting in Marseille, say they are ´´committed to strong and coordinated international response´´ to the current economic challenges.

European shares fell sharply on rumours that Greece could default on its debt over the weekend. The Greek finance minister issued a statement vehemently rejecting the rumours. But markets were also rattled by news that European Central Bank Board member Juergen Stark will stand down from his post. The FTSEurofirst index fell by 2.5pct, the German Dax lost 4.0pct and the UK FTSE lost 2.4pct.

US sharemarkets fell sharply on fears of a Greek default and worries about the potential for terrorist attacks to mark the 10th anniversary of the attack on the World Trade Centre in New York. The Dow Jones fell by 303pts or 2.7pct with the S&P 500 also down by 2.5pct while the Nasdaq lost 61pts or 2.4pct. Over the week the Dow fell 2.2pct, the S&P 500 lost 1.7pct while the Nasdaq fell 0.5pct.

US long-term treasuries rose on Friday (yields lower) as fearful investors embraced safe-haven assets. US 2yr yields fell by 2pts to 0.17pct and US 10yr yields fell by 7pts to 1.915pct. Over the week US 2yr yields fell 3pts while US 10yr yields fell by 7pts.

The US dollar strengthened against the Euro and commodity currencies on on-going worries about the sovereign debt crisis in Europe. The Euro fell from near US$1.3920 to US$1.3630, before ending the US session near US$1.3660. The Euro is near US$1.3595 this morning. The Aussie dollar fell from highs around US106.35c to US104.20c, ending US trade near US104.50c and dropping to US104.30c this morning. And the Japanese yen was volatile over the European and US sessions. The Japanese yen eased from 77.40 yen per US dollar to JPY77.80, strengthened to JPY77.20 before selling off again in late US trade to JPY77.50.

Global crude oil prices fell on Friday as the US dollar rose and investors retreated from economic growth-dependent commodity prices. Nymex crude oil fell by US$1.81 or 2.0pct to US$87.24 a barrel and London Brent crude fell by US$1.78 or 1.6pct to US$112.77 a barrel. Nymex was up by 0.9pct over the week with Brent up 0.4pct.

Base metal prices fell on the London Metal Exchange on Friday in response to a stronger US dollar. Metals fell up to 4.2pct with nickel and tin faring the worst. Over the week metal prices fell between 0.3-3.0pct with lead faring the best and tin falling the most. But the gold price rose on Friday as investors again embraced safe-haven assets. The Comex December gold price was up by US$2.00 an ounce or 0.1pct to US$1,859.50. Gold fell by US$17.40 or 0.9pct over the week.

Ahead: In Australia, lending finance and credit & debit card lending figures are released. In the US, no key economic data is due.