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Financial Focus

A split has emerged in the German government over whether to grant Greece a second bail-out package with Wolfgang Schäuble, finance minister, pushing to let Athens default while Chancellor Angela Merkel is firmly against it, according to German and Eurozone officials. Mr Schäuble was said to have come to his hard line view in the light of haggling over
Greece’s fresh austerity measures under a second rescue programme and the refusal of some Greek politicians to promise to back the deal after elections due in April.

BRITAIN will share in a Falkland Islands windfall when oil starts flowing there later this decade and, with taxes and royalties estimated at up to $167 billion (105.7 billion pounds), the potential prize could inflame mounting tensions with Argentina over sovereignty. Sea Lion, a field discovered in 2010 north of the islands by explorer Rockhopper, will generate $10.5
billion of tax and royalty revenues for the Falklands over its estimated 20-year life.

THE EUROPEAN CENTRAL BANK has secured protection against forced losses on its Greek government bonds in a move that should make it easier for profits on its holdings to be put towards Greece’s second bail-out. The ECB’s Greek bonds, bought for an estimated €40bn, will be exchanged for new bonds exempt from any legal action by Athens to impose losses.

BRITAIN’S FTSE 100 closed off intraday lows yesterday as upbeat U.S. economic data brought some cheer to an otherwise
gloomy macro outlook, helping oil stocks pare losses, while banks and miners sagged as Greece’s debt crisis rumbled on.
London’s blue chip index closed down 6.78 points, or 0.1% at 5,885.38, bouncing off an intraday low 5,829.38 as U.S. equity
markets strengthened.
ASIAN SHARES were higher on the back of strong economic data and corporate earnings while the weaker yen boosted
Japanese exporters. Sentiment improved after US stocks hit the highest level in nearly four years with a string of US housing,
jobless and manufacturing data showing strength in the world’s biggest economy. “The US continues to be one of the brighter
spots in the global economy,” Barclays Capital said in a note. “Greece is less likely to deliver a scare to markets, which already
seem to be pricing quite a negative scenario.”
THE YEN dropped against all its major peers, reaching the weakest in more than three months against the dollar, as gains in
Asian stocks and signs of growth in the U.S. economy damped demand for haven assets. The dollar weakened versus 13 of its
16 major counterparts before the release of an index of U.S. leading indicators forecast to show a fourth month of gains. The
euro gained against the yen for a second day amid speculation Greece will get its second bailout, with the region’s finance
ministers scheduled to meet on February the 20th.
IRAN’S top oil buyers in Europe are making substantial cuts in supply, months in advance of European Union sanctions,
reducing flows to the continent in March by more than a third – or over 300,000 barrels daily, industry sources said on Thursday.
Iran was supplying more than 700,000 barrels per day (bpd) to the EU plus Turkey in 2011, industry sources said, but by the
start of this year imports had sunk to about 650,000 bpd as some customers cut back in anticipation of an EU ban.
WHEAT gained as Egypt, the world’s largest buyer, bought U.S. supplies, signalling demand may be shifting away from Russia
and other producers. Corn and soybeans also advanced. Wheat for May delivery gained 0.5% to $6.3825 a bushel on the
Chicago Board of Trade, taking gains for the most- active contract to 1.3% this week.

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