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Financial Focus

BoE GOVERNOR Mervyn King may pump another £50bn into the UK
economy today as he boosts protection for a nascent recovery from the
threat posed by Europe’s debt crisis.

TALKS amongst leaders in Greece broke up early this morning with
pension reductions being the sticking point preventing the agreement on
economic overhauls sought by the EU and IMF in exchange for lending
additional €130bn to the Greek government.

CHINESE consumer prices rose 4.5% in January from a year earlier,
breaking a streak of five straight monthly declines. The rebound is largely
due to a shopping blitz before last month’s Chinese New Year.

MORE than a dozen traders and brokers in London and Asia have been
fired, suspended or put on leave by their employers as a multinational
probe into alleged manipulation of crucial global lending rates accelerates.

US REGULATORS are due to announce a $39.5bn settlement to resolve
allegations that five leading banks systematically abused borrowers in their
pursuit of improper home seizures. The banks will be forced to reduce
borrowers’ loan balances and monthly payments and make about $4.2bn
in cash payments to an estimated 750,000 aggrieved homeowners.

DESPITE uncertainty over Greece, Europe’s bond markets have been
rallying strongly. Now the “risk on” sentiment has spilled over into markets
for company and bank debt, with investors snapping up a wave of bond
issues from Italy, Ireland and Spain.

GLOBAL stocks entered a bull market yesterday as the MSCI All-Country
World Index extended its gain from its October low to 20%.

ASIAN stocks fell overnight after Greek leaders failed to reach an agreement on terms required to secure a second bail-
out while Chinese inflation accelerated, which could lead Beijing to maintain tight monetary policies

EUROPEAN stocks are set to edge higher today, with investors positioning for a possible successful resolution to Greek
bailout talks and hoping for a promise of easier access to liquidity from the European Central Bank. Markets are putting a
relatively positive spin on the news as Greek finance minister Evangelos Venizelos heads to Brussels to meet the
lenders, despite talks stalling last night.

THE EURO rose toward a two-month high after a Greek government official signaled confidence that finance ministers in
the currency bloc will approve a second financing accord for the debt-strapped nation. STERLING held onto a decline
from yesterday on prospects the Bank of England will expand its asset-purchase program. THE ECB also meets today to
set monetary policy.

OIL traded higher for a third day in New York as a US government report showed refineries processed more crude last
week and Greece moved closer to securing a second bailout. Futures gained as much as 0.4% and headed for the
longest rising streak since December.

COPPER futures rose to a 20-week high after the government pledged to support first-time homebuyers in China, the
world’s biggest consumer of the metal used in pipes and wires.

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