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Financial Focus

The UK yesterday took a step towards imposing new regulations that will cost banks billions and risk eroding the competitiveness of the City. The ICB says the reforms will cost banks between £4bn and £7bn a year, but will benefit the economy because of greater financial stability. The move will see retail banks hived off into separate subsidiaries and forced to treat their investment banking arms as third parties.

THE U.S. economy will grow less than previously estimated through 2012, reflecting a slump in confidence, limited consumer spending and a struggling housing market, a survey of business economists showed.

JAPANESE Finance Minister Jun Azumi’s pledge to take “bold actions” on the yen may be put to the test after a rally in overseas bonds reduced their yield advantage over Japanese debt. Yields on two year U.S. securities fell to a 19-year low, relative to similar maturity notes, a gap that is relatively high.


THE MSCI Asia Pacific Index added 0.5% as of 13:05 after yesterday falling to the lowest level since August the 31st 2010. The S&P 500 Index futures advanced 0.4%, oil gained 0.4% in New York, copper jumped 0.9% and gold rose 0.9%. The Nikkei 225 rose 0.6% as of 13:17 in Tokyo, rebounding from the lowest level since April 2009. The broader Topix gained 0.9% after ECB president Jean Claude Trichet signaled support for the banking system.

EUROPEAN shares are set to rebound today after heavy falls in the past two sessions, with a late rally on Wall Street and a rise in Asia on hopes that China could provide financial support to highly-indebted Italy seen triggering a short recovery. Investors returned to equities in late U.S. trading and in Asia after the Financial Times reported that Italy had asked China to make “significant” purchases of Italian debt.


THE EURO fell towards its lowest level since 2001 against the yen on speculation Greece is nearing default before Italy sells bonds today amid concern the region’s debt crisis is worsening. The 17 nation currency declined for a fourth day against its Japanese counterpart as traders wagered the ECB will cut its benchmark interest rate over the next year.


OIL rose for a second day on speculation crude stock piles shrank last week in the U.S., after storms curtailed offshore production. Prices advanced as much as 0.2% before an Energy Department report tomorrow that may show that oil supplies fell for a second week.


THAILAND is willing to relinquish its role as the world’s biggest rice exporter as the government prepares to buy grain directly from farmers to boost prices and rural incomes, Deputy Prime Minister Kittiratt Na-Ranong said. Rice futures rose 0.2% on the Chicago Board of trade as of 11:54am Bangkok time, poised for the highest close since September 2008.

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