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Financial Focus

CHINA’s inflation cooled to a 15-month low, leaving the government more room to support growth as a global slowdown hurts exports.

JAPAN’s current-account surplus narrowed in November as slowing growth in China and Europe and the appreciation of the yen hurt demand for Japanese products.

SPAIN will auction as much as €5bn of bonds due 2015 and 2016 today, while Italy is scheduled to sell €12bn of bills.

GERMAN exports and French business confidence data may be enough to convince the ECB to keep its key interest rate at 1% at their policy meeting today.

THE BANK of England may resist adding to emergency stimulus again today as policy makers await new forecasts and the economy showed some resilience heading into 2012.

THE US Treasury sold 10-year debt below a yield of 2% for the first time yesterday, with investors locking up their money at low returns for the safety of owning government debt.

MARKETS:

ASIAN stocks fell overnight, with a regional benchmark index snapping three days of gains, as weaker Japan trade data added to evidence of a global slowdown, damping speculation that lower inflation in China may result in looser monetary policy.

EUROPEAN stocks are seen inching higher today, with gains limited by lingering concerns over the Eurozone debt crisis ahead of a Spanish bond auction and the European Central Bank’s interest rate decision.

BRITAIN’s FTSE 100 index was seen opening slightly higher today, holding firm as investors awaited a Spanish debt auction seen as a key test of investor confidence.

CURRENCIES:

THE EURO is 0.5% from a 16-month low against the dollar on speculation ECB policy makers won’t take steps today to support growth even as reports signal the euro-area economy is struggling. The currency held a drop from yesterday versus the yen before figures estimated to show European output shrank in November.

ENERGY:

THE US efforts to tighten economic sanctions on Iran over its nuclear program won backing from Japan a day after China rejected limiting oil imports from the country. EU foreign ministers are scheduled to decide at a January 23rd meeting when to impose, and how to phase in, an embargo on Iranian oil, which is designed to force Iran back to the negotiating table over its nuclear program.

COMMODITIES:

COPPER prices may gain as much as 25% in the second half of this year on steady demand from China, the world’s top consumer, amid tight supplies, according to a leading commodity analyst yesterday. CORN purchased from Europe by Japan, the world’s largest buyer of the commodity, doubled in the past two months, as local feed mills seek cheaper alternatives to US supply.

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