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Financial Focus

THE FIRST polls since Greeks headed to the election on Sunday showed
a dramatic rise in support for anti-bailout party Syriza yesterday, indicating
the far left party would now be the biggest party if the new elections were
held. Syriza declared the current bailout agreement invalid, and its
election could lead to the country leaving the Eurozone.

MADRID is expected to unveil a plan today to improve the strength of its
banks, which the Bank of Spain has estimated are saddled with €184bn
(£148bn) of dodgy property loans made during the bubble. Analysts,
however, do not believe the measures to be announced by the
government will be enough.

JPMORGAN CHASE, America’s largest bank, admitted late last night that
it had taken an unexpected $2bn loss after a hedging strategy failed.

THE SHAREHOLDER Spring continued to blossom yesterday as investors
rejected another executive pay settlement. Pendragon, Britain’s leading
car dealer, was forced to back down on plans to increase its directors’ pay
packets after 67% of shareholders voted against its remuneration report.

THE UK and US now expect large banks to have resolution plans or “living
wills” in place by the end of this year, which they hope will prevent
taxpayers from having to bail out a failing bank ever again.

EUROPE’S troubled economies are falling further and further behind those
in the rest of the continent and the world, data (Composite Lending Index
& World Economic Survey) showed yesterday, suggesting the pain of the
Eurozone crisis will not be over any time soon.

THE ECB urged European governments yesterday to give the bloc’s institutions the power to force Eurozone member
states to take the necessary action to rein in deficits. The ECB wants governments to address the core of the Eurozone
debt crisis by implementing structural reforms and spending cuts after it lent support by lowering interest rates and
injecting more than €1 trillion into financial markets.

Markets:
OVERNIGHT, Asian shares retreated as investors were spooked by JPMorgan’s $2bn traading losses, which
overshadowed stronger-than-expected US employment data.
TODAY, financial spreadbetters expect Europe’s main stock indexes to resume a two-week retreat as Greece’s political
deadlock and a huge loss from JPMorgan rattled investors.
Currencies:
THE EURO slid to a three-month low before Italy, Spain and France sell bonds next week amid concern the region’s debt
crisis is deepening. The dollar and the yen were poised to rise versus most major peers this week as concern Greece will
be unable to stay in the euro bloc boosted demand for safer assets.
Energy:
OIL fell in New York and is heading for a second weekly drop on concern Europe’s debt crisis will worsen and curb fuel
demand as global crude supplies increase.
IRAQ, seeking to more than double oil output by 2015, is poised to overtake Iran as OPEC’s second-largest producer by
the end of the year as sanctions hobble crude production in its neighbour.
Commodities:
COMMODITIES declined for an eighth day, wiping out gains for the year, on concern that Europe’s debt crisis may
worsen and as JPMorgan Chase said it had a $2 billion trading loss on derivatives.

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