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Financial Focus

BARCLAYS chairman Marcus Agius will resign this morning as the
embattled bank struggles to contain a growing crisis that began with last
week’s £290m fine for abusing the Libor interest rate. Meanwhile
embattled chief executive Bob Diamond faces a challenge to stay in his job
as leading politicians line up to criticise his handling of the affair.

FRANCE will lower its economic growth forecasts for this year as part of a
revised budget the government will present later this week to meet its
public deficit targets, finance minister Pierre Moscovici said yesterday.
THE ECB, which has kept borrowing costs at a record low of 1% since
December, will probably lower the benchmark rate by 0.25% point on
Thursday, a Bloomberg survey of economists shows.

CHINA, the world’s biggest exporter, may need to add more stimulus to
arrest an economic slowdown after an HSBC report showed the steepest
decline in overseas orders since the global financial crisis. The nation’s
weaker growth is rippling through Asia, with South Korea’s sales to China,
its largest market, failing to increase in the first 20 days of June.

BRITAIN’s dominant service sector stagnated in April and an extra holiday
and festivities for the Queen’s Diamond Jubilee failed to lift consumers’
spirits, data showed on Friday, giving little hope of an escape from
recession in the second quarter. The gloomy news strengthens
expectations the Bank of England will restart its printing presses when it
meets next week and provide further stimulus to an economy that sank
back into recession around the turn of the year.

Markets:
STOCKS jumped globally on Friday after EU leaders dropped the requirement that governments get preferred creditor
status on crisis loans to Spain’s blighted banks. Lenders can also be recapitalised directly with EU bailout funds rather
than being channeled through governments, EU President Herman Van Rompuy said after a two-day summit.

THE MSCI All-Country World Index of shares in 45 nations climbed 6% over the first six months, led by the U.S., where
$1.1tn was added to share values.

OVERNIGHT, Asian stocks headed for their longest winning streak since March after European leaders agreed on
measures to ease the region’s debt crisis and as a survey showed large manufacturers in Japan became less
pessimistic. Futures on the Standard & Poor’s 500 Index, however, slipped 0.2%.

TODAY, European stocks were seen opening mixed, as last week’s sharp rally triggered by new bold measures to fight
the Eurozone debt crisis loses steam, while tepid Chinese manufacturing data revives worries over the outlook for the
global economy.

Currencies:
THE EURO fell against most peers before data today that may show the currency bloc’s jobless rate climbed to a record
and manufacturing contracted, boosting prospects the European Central Bank will cut interest rates.

Energy:
OIL fell in New York as investors sold contracts to profit from the biggest price surge in three years before reports today
that may signal Europe’s economic slump is deepening. Futures declined as much as 1.5% after surging 9.4% on Friday.

Commodities:
MORGAN STANLEY stuck with recommendations that investors buy gold, copper and iron ore. As Europe’s crisis
threatens growth, investors should seek “exposure only to those metals and bulk commodities that reflect the benefits of
tight supply conditions and pockets of residual demand strength,” said in a report at the end of last week.

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