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Financial Focus

European banks are looking for ways to move as much of their trade as possible through low-tax jurisdictions to cut their tax bill, it emerged yesterday. The institutions are finding ways to restructure their entities to avoid paying onerous tax rates in jurisdictions such as the UK. Up to 30% of trade values at major global banks could be booked through hubs such as Hong Kong or Singapore rather than Europe.

GOLDMAN SACHS was hit by more government action yesterday as it agreed to pay a fine and reform some of its mortgage management practices after wrongfully repossessing borrowers’ homes in 2009 and 2010.

JUN AZUMI, a lawmaker from Japan’s devastated northeast, will become the nation’s eighth finance chief since 2008, tasked with funding earthquake reconstruction and securing a recovery endangered by a soaring yen.

MARKETS:

FUTURES on the S&P 500 Index fell 0.4% today. The index retreated 1.2% in New York yesterday as banks fell and investors speculated that the U.S. jobs report will show the economy continues to struggle.

THE HANG SENG slipped 1.3% as of the midday trading break in Hong Kong. Almost 10 stocks fell for each that rose on the 46 member gauge. The measure rose the past four days, sending the index toward a weekly gain of 3.7%. The Nikkei stock average fell today, slipping back below the 9,000 level as profit taking emerged after six straight days of gains and following a drop in U.S. shares ahead of a key jobs report.

EUROPEAN shares are expected to drop today, halting four days of gains after Wall Street and Asia fell on concerns the U.S. non-farm payroll data could indicate the United States was close to recession. Investors will watch closely the U.S. non-farm payroll data for any clues about the strength of the economy as recession fears in the U.S. were one factor behind the big sell off in European shares last month.

CURRENCIES:

THE SWISS franc and yen strengthened as a decline in Asian stocks and a report that the U.S. will sue banks over mortgage-backed securities boosted demand for refuge currencies.

ENERGY:

OIL dropped in New York, trimming a second weekly gain, as investors speculated a U.S. jobs report will signal the economy is weakening, curbing fuel demand in the world’s biggest crude consumer.

COMMODITIES:

COMMODITIES slumped yesterday, paced by wheat and zinc, on speculation that slowing manufacturing will curb demand for raw materials. The S&P GSCI index of 24 commodities fell 0.5% at 2:31 pm New York time after dropping as much as 0.8%.

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