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Financial Focus

PRIVATE investors holding more than €100bn in Greek bonds have
declared publicly they will participate in Greece’s huge debt restructuring,
making it likely that history’s largest sovereign default will proceed as
planned.

GERMANY’s economic rebound, which has helped counter gloom created
by Europe’s debt crisis, was set back in January by an unexpectedly sharp
fall in industrial orders of 2.7% when compared with December.

UK CORPORATE pension shortfalls have increased by an additional
£90bn since the Bank of England resumed gilt purchases last October in
an effort to drive down interest rates, according to an employers’ body.

INTEREST rates set by banks for savings and loans products are no
longer dictated by the Bank of England’s base interest rates and will
continue to rise, according to analysis of the sector. Returns offered to new
savers by lenders are at their highest level for three years, as banks fight
for retail deposits to fund mortgage lending.

US EMPLOYMENT improved in February with the private sector adding
216,000 jobs.

ASIA is set to outspend Europe on defence this year for the first time in
modern history as European Union nations cut military budgets and
Chinese expenditure rises, highlighting a shift in military power.

Markets:
US stocks broke a three-day losing steak yesterday, recovering some of
the recent losses after US private sector jobs increased more than
expected.

ASIAN stocks were lifted by improving prospects for a Greek debt swap deal and a recovery in the US labour market while a weaker yen boosted Japanese exporters.

EUROPE’s equity markets are seen opening higher today, with investors positioning themselves for more upbeat news on the US economy and betting Greece will be able to carry off a key bond swap needed to avoid a chaotic default. A slightly better than expected U.S. private sector employment report has paved the way for further gains in the run up to Friday’s keenly-watched non-farm payrolls report, for which Thursday’s weekly jobs data will bring some final clues.

Currencies:
THE YEN weakened against all of its major peers after Japan posted a record current-account deficit, threatening to undermine the currency’s haven status. THE EURO advanced for a second day against the yen and the dollar before Greece’s debt-swap offer to private creditors concludes at 10 pm Athens time today. The dollar was 0.7% from a ninemonth high against the yen as speculation eased that the Federal Reserve will provide further stimulus.

Energy:
OIL traded near the highest price in two days on signs that sanctions on Iran are succeeding in cutting its crude exports.
Analysts believe, however, that oil may decline in the second quarter on weakening seasonal demand, an economic slowdown in China and an easing in Middle East tension.

Commodities:
GOLD climbed for a second day, as record bullion holdings in exchange-traded products signaled stronger investor demand, while Greece’s progress toward a second bailout boosted the appeal of equities and commodities. SPOT SILVER gained overnight, extending yesterday’s 1.4% advance.

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