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Financial Focus

Asian stocks fell, with the regions benchmark index set for its lowest close in two months after Applied Materials Inc. forecast profit and sales that missed analyst’s estimates, underscoring concern earnings growth will falter. Earnings for companies on the MSCI Asia Pacific contracted an average 11% last quarter, the first drop in at least six quarters according to Bloomberg. Japan posted today its first trade deficit for the month of April in 31 years as exports slumped.

OUT of control government spending sent the UK deficit soaring to a record high in the month of April, official data exposed yesterday. Current spending by the central government hit $54.1bn last month, a 5% jump from the same point last year. Government borrowing for April struck £10bn, up from £7.3bn in April 2010. The deficit for 2010-11 was revised down to £139.4bn; yet government debt now totals £910.1bn, equivalent to 60.1% of Britain’s GDP.

MARKETS:

EUROPEAN shares are set to slip today, reversing the previous day’s gains and tracking the weak U.S. and Asian markets, as a slowing pace of economic growth and worries over the euro zone debt troubles prompt a pullback in risk appetite.

THE FTSE 100 is seen to open 0.9% lower this morning, while the DAX is set to dip 61-62 points and Frances CAC 40 is seen down by 1% according to the financial spread betters.

WALL STREET retreated yesterday on continuing concerns about a slowdown in growth more than offset the gains in energy shares and positive housing data. Better-than-expected U.S. housing data, showing the number of new homes rose 7.3% last month, failed to lift investors’ sentiment.

CURRENCIES:

THE DOLLAR and yen advanced against their major counterparts as Asian stocks slumped and commodities declined, boosting demand for the safest assets. The Dollar Index approached a seven-week high before U.S. reports tomorrow are forecast to show that the world’s largest economy is recovering at a faster pace and initial jobless claims decreased for a third week.

ENERGY:

OIL dropped from the highest in almost a week in New York after an industry funded report showed gasoline supplies surged in the U.S., the world’s largest crude user, signalling demand may falter. Futures slipped as much as 0.9%, switching direction for the sixth day. Stockpiles of motor fuel climbed 2.44 million barrels in the seven days to the 20th of May, the most since February.

COMMODITIES:

GOLD fell as prices near the highest level in three weeks prompted some investors to lock in gains. Gold priced in Euro rose to a record high of $1,083.18. Immediate delivery gold decreased as much as 0.3% to $1,524.4 by 11.24 am in Singapore, after rising to $1,527.75, the highest level since 4t May. Gold futures for Junewere little changed at $1,524.40. Cash silver shed 0.4% to $36.515 following yesterday’s 4.6% rally.

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