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Friday financial focus

• Global: Stocks rise on US economy hopes
• Europe: ECB should keep policy loose
• China: Slowest growth for 13 years
• Japan: Dispute with China may disrupt regional stability
• Cayman Islands: Secrecy abandoned
• Commodities: Grain price pressure from US drought
• Currencies: Asian currencies set for fourth weekly gain
• Energy: Oil near four-month high on Chinese data
• Focus on: Cameron’s cancelled speech

Global: Stocks rise on US economy hopes
Global stocks rose on Thursday, pushing the S&P 500 to fresh 5-year
highs, as optimism about the US economy reinvigorated the New Year
global “risk” rally. The FTSE All-World index rose 0.5% as the FTSE
Eurofirst turned an initial loss – partly the result of weakness in mining
stocks – into a gain of 0.3%. Wall Street’s S&P 500 closed 10 points
higher at its best level since December 2007.

Europe: ECB should keep policy loose
The European Central Bank should keep monetary policy easy and
perhaps try to lower borrowing costs further to help the Eurozone’s
struggling economy, the head of the International Monetary Fund said
on Thursday. “Continued if not further monetary easing will be
appropriate in order to sustain demand,” IMF Managing Director
Christine Lagarde told a news conference.

China: Slowest growth for 13 years
China’s economy slid to its slowest growth in more than a decade last
year, dragged down by global woes and a domestic campaign to
deflate a property bubble. But the country finished 2012 on a higher
note with a rebound that analysts believe will filter into a stronger
performance this year. China’s gross domestic product expanded 7.8%
last year, the lowest since 1999. In Q4, growth was 7.9% year-on-year,
breaking a streak of seven consecutive weaker quarters.

Japan: Dispute with China may disrupt regional stability
Japan’s new foreign minister, Fumio Kishida, meets with Secretary of State Hillary Clinton today in Washington, in the
highest-level meeting between the two countries since Prime Minister Shinzo Abe took office last month. Abe is boosting
defense spending in response to China’s increasingly assertive claims to islands in the East China Sea. The conflict has
damaged a $340 billion trade relationship and prolonged Japan’s recession, while stoking US concerns of an escalating
confrontation. An American official yesterday called on Asia’s two biggest economies to resolve their differences, and is
pushing for reassurances that the US will not be dragged into the China-Japan dispute.

Cayman Islands: Secrecy abandoned
The Cayman Islands are poised to break with decades of secrecy by opening thousands of companies and hedge funds
domiciled on the offshore Caribbean territory to greater scrutiny. The British overseas territory, which wants to shed its
reputation for clandestine financial activity, is introducing sweeping reforms that will make public the names of thousands
of previously hidden companies and their directors.

Commodities: Grain price pressure from US drought
The US government warned in its forecast yesterday that the heat has gone, but the terrible US drought remains –
and it is not likely to disappear. While snow and rain have relieved some areas, the majority of the Midwest and
high plains regions are still suffering drought. States such as Nebraska and Kansas show no sign of improvement,
while the situation in Texas is set to worsen. The drought pushed grain futures prices to record highs last year,
although prices have steadied as traders take comfort in a large, impending Brazilian crop. Another dry year – or a
surprisingly wet one – in the world’s biggest grain exporter could soon end this period of calm.

Currencies: Grain price pressure from US drought
Asian currencies headed for a fourth weekly gain, their longest winning streak since September, on optimism the global
economy is recovering. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies
excluding the yen, reached a 16-month high yesterday.

Energy: Oil near four-month high on Chinese data
Oil traded near the highest price in four months in New York overnight on Thursday, and headed for the longest weekly
winning streak in 14 months after economic growth accelerated in China, the world’s second-biggest crude consumer.

Friday data 0650 UK (FT.COM)
Index Value Change
since last session
FTSE 100 6,132.36 +0.46%
S&P 500 1,480.94 +0.56%
Eurofirst 300 1,165.54 +0.48%
Nikkei 225 10,913.30 +2.86%
Shanghai 2,310.18 +1.11%
Commodities Value Change
since last session
WTI Crude $95.53 +0.04%
Brent Crude $111.24 +0.13%
Gold 100oz $1,689.20 -0.07%
Copper $364.70 0.00%
Corn $727.00 +0.41%
Forex Pair Value Change
since last session
$ per € 1.3385 +0.10%
$ per £ 1.5980 -0.07%
¥ per $ 90.0100 +0.17%
¥ per € 120.5100 +0.23%
€ per £ 1.1938 -0.15%
Bonds Rate Change
since last session
10Y UK Gov 2.03% -0.01%
2Y US Gov 0.27% 0.00%
10Y US Gov 1.88% -0.01%
10Y Japan 0.75% 0.00%
10Y Bund 1.55% +0.01%

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