China pledged to open more of its markets to U.S. companies after a two-day gathering of top officials that underscored the gap between the two nations over how fast the Chinese currency should rise. The world’s two biggest economies settled on incremental steps to improve business ties. China pledged to strengthen intellectual property rights and phase out domestic purchasing preferences by the government, while offering foreign financial firms a larger role.
AUSTRALIA’S government will end 23 years of spending growth to ease inflation from a mining boom and support the return to a budget surplus, even as it plans to help companies hurt by a record high currency. The underlying cash deficit will narrow to A$22.6 billion in the 12 months to June 30, 2012, less than half the A$49.4 billion gap this fiscal year. The government plans A$22.2 billion in savings over the next four years to deliver a A$3.5 billion surplus in 2012-13.
MARKETS:
EUROPEAN shares are expected to extend the previous session’s gains today, mirroring advances in Asian equities and on Wall Street, with stronger commodity prices seen supporting energy and mining stocks.
THE FTSE 100 is expected to open 10 to 11 points, or 0.2% higher, on yesterday’s close, with the DAX to gain 24 to 27 points, and France’s CAC-40 to rise as much as 0.2%.
“EUROPE’S major equity markets are set to start the day in an upbeat mood after last night’s strong leads in Wall Street, helped along by ebbing fears over Greece,” said Cameron Peacock, analyst at IG Markets.
CURRENCIES:
STERLING eased from its one month high against the Euro and lost ground versus the dollar on Tuesday, with some investors bracing for more losses if the Bank of England cuts growth forecasts in its inflation report. Traders said such a view may push back the chances of a UK rate hike and could weigh on sterling, allowing the Euro to regain some lost ground.
ENERGY:
OIL traded on a one-week high in New York as speculation that flooding on the Mississippi will disrupt fuel supplies. This countered the concern that demand may falter in China, the world’s second largest crude consumer. Brent crude for June settlement rose 7 cents, or 0.1%, to $117.78 a barrel on the London based ICE Futures Europe exchange.
COMMODITIES:
GOLD AND SILVER extended their advance as faster-than-forecast inflation in China and a resurgence of Europe’s sovereign-debt crisis increased demand for precious metals as a store of value. Immediate delivery gold gained as much as 0.5% to $1,523.82, after last week’s 4.4% slump. Silver futures, which shed 27% last week, increased as much as 1.9% to $39.20 an ounce.
