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Financial Focus

UK PRIME MINISTER David Cameron has said his government will
“redouble all our efforts” to turn around the UK economy in the face of a
fresh recession and “a very long and painful process” to fix the Eurozone.
Cameron said last week’s confirmation of a double dip recession in Britain
was “very disappointing”.

THOUSANDS of people protested across Spain yesterday against
government cuts aimed at tackling a debt crisis that has pushed the country
into recession and sent unemployment close to 25%. Protesters closed
central parts of the capital Madrid to protest against cuts to education and
health services the government says must be made to help slash the public
deficit.

THE HEAD of Greece’s biggest bank has made a spirited appeal for fresh
equity from private shareholders as the most stressed nation of the
Eurozone prepares for a potentially disruptive general election next
weekend and the imposition of tough new capital requirements by
regulators.

GERMAN ENGINEERS have launched warning strikes in pursuit of a 6.5%
pay increase that could fuel fears about inflation pressures building in
Europe’s largest economy.

MARKETS:
ASIAN STOCKS gained ground as investors focused on a string of strong corporate results in the US, while higher commodity
prices boosted Australian resources shares. Trading was subdued with markets in Japan and China closed for public holidays.
Investors appeared to shrug off weaker-than-expected US economic growth, paying more attention to recent above-forecast
corporate earnings. Gross domestic product in the world’s largest economy grew 2.2% in the first quarter, an annualised growth
rate that came in below market expectations of 2.7%.

BANKS and energy shares led a rally in Hong Kong in the wake of robust earnings and Friday’s strong finish on Wall Street. In
Sydney, Australia and New Zealand Banking Group gained 0.8% amid growing speculation Australia’s central bank may cut
interest rates with inflation at its lowest since the 1990s due as economic growth falters.

CURRENCIES:
THE EURO declined for a third day against the yen on prospects a report today will show Spain’s economy shrank as Europe’s
debt crisis deepened. The 17-nation currency touched the weakest level in almost two years versus the pound before the
Spanish government holds a media briefing today to explain steps to cut its deficit.

ENERGY:
NIGERIA plans to increase oil production capacity to 4 million barrels a day by 2020 and expand its crude reserves to 40 billion
barrels, Petroleum Minister Diezani Alison-Madueke said. Africa’s largest oil producer also aims “in the years ahead” to boost
output of liquefied natural gas by an additional 20 million metric tons a year from the current level of 26 million tons.

COMMODITIES:
SPECULATORS reduced bullish bets on corn by more than any other commodity, just before the U.S. reported its single
biggest export sale in 18 years and prices had their largest two-day rally in almost a month. U.S. exporters sold 1.44 million
metric tons of corn in a single day, taking the four-day total to 2.84 million tons, the U.S. Department of Agriculture said. China is accelerating purchases to feed a hog herd that is projected by the USDA to reach an all-time high of 690 million this year. The
demand combined with less bullish speculators will increase volatility in futures markets and lead to “major price spikes,”
Rabobank International said.

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