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Financial Focus

Gaddafi has accepted a roadmap for ending the conflict in Libya, South African president Jacob Zuma said yesterday after leading a delegation of African leaders at talks in Tripoli. “[Gaddafi’s] delegation has accepted the roadmap as presented by us. We have to give ceasefire a chance”, Zuma said following several hours of talks.

UK factory gate inflation unexpectedly accelerated in March to its highest level since October 2008 after strong rises in the cost of petroleum and food. The Office for National Statistics said producer output prices rose by 5.4%, while analysts had expected a slowdown to an annual 5.1%. Stripping out the effect of rising food and petroleum prices, core output price inflation slowed slightly to 3% from 3.1%.

THE BANK of England’s chief hawk Andrew Sentance said on Sky News yesterday that the monetary policy’s opinion is turning towards a gradual rise in UK interest rates. Sentance was a lone voice on the committee for much of last year, voting for higher rates from June onwards. This year he has been joined by two other members of the committee, Martin Weale and Spencer Dale, both wanting a rise of 0.25. Sentance is pushing for 0.5%.

MARKETS:

EUROPEAN shares set a five-week closing high on Friday, led by miners tracking stronger metal prices and investors positioning themselves for an expected positive start to the US corporate results season next week.

CHINESE shares hit a high for the year, boosted by the rally in commodities prices, offsetting profit-taking pressure in other sectors. The Nikkei edged lower after Citigroup slashed its rating on the automakers sector to “sell” although buying of reconstruction-related stocks supported the market. Hong Kong’s Hang Seng Index, up 5% in the past month, ended the morning little changed from Friday’s close.

EUROPEAN shares are expected to open slightly lower on Monday, mirroring losses in Japan and on Wall Street, with strong crude oil prices seen prompting investors to trade cautiously.

CURRENCIES:

THE EURO fell against most of its major currencies overnight as traders considered its advance to a 15-month high against the dollar excessive, given Europe’s lingering debt crisis. China’s yuan traded near a 17-year high after official data showed exports rising more than analysts predicted last month.

ENERGY:

US CRUDE futures rose above $113 per barrel overnight, the highest level since September 2008, as unrest in Libya disrupted crude output and investors purchased commodities as a hedge against the declining dollar.

COMMODITIES:

THE GOLD rally continued overnight, as it jumped to a record high for a fifth straight trading day as a weak dollar continued to support commodity prices. Spot silver rose as high as $41.32 an ounce, its strongest since 1981.

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