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Midweek financial focus

Midweek Headlines:
• German investor confidence jumps in February
• Average Brit facing a financial shortfall of 63% in retirement
• State-rescued Irish Life sold to Canadians to lighten load
• Eurozone drags OECD into decline
• US industrial output hit by car problems
• France pledges investment and tourism support for Greece
• S&P 500 at highest level in five years
• Asian stocks extend 18-month high on global outlook
• European markets likely to consolidate today
• Euro rises before consumer confidence report
• US crude fluctuates after rising most in a week
• Gold snaps five-day losing streak on stimulus speculation

News:
German investor confidence jumped more than economists forecast in
February to the highest in almost three years, adding to signs that
Europe’s largest economy is rebounding from its slump.

UK workers are worryingly underprepared for retirement, data out this
morning has revealed, with many predicted to run out of savings just
seven years after leaving work. The UK came at the top of a table of
the world’s worst savers, with the average Briton facing a financial
shortfall of 63% over the 19 years they are expected to live after
retiring.

Canadian life insurer Great-West Lifeco bought state-rescued insurer
Irish Life for €1.3bn yesterday in a deal that increases its presence in
Ireland and lightens the Irish government’s debts. Ireland last year
paid the same amount to take over Irish Life, formerly the insurance
arm of bailed-out Irish Life & Permanent, after the Eurozone debt crisis
forced the suspension of its sale in late 2011. The sale, will help to
push the Irish government’s debt to just below 120% of GDP this year.

Falling output across the Eurozone pulled the Organisation for
Economic Co-operation and Development (OECD) group of major
economies into decline in the fourth quarter of 2012, the organisation said yesterday. The total output from OECD
countries fell 0.2% in the final three months of last year, dragged down by a 0.6% contraction in the Eurozone economy.

US manufacturing output started 2013 with a fall, according to data out yesterday, driven by weakness in car production.
Factory production dropped 0.4% in January, Federal Reserve data showed, pushed by the 3.2% crash in car output.

French President Francois Hollande yesterday told Greece that austerity alone could not bring the country out of its
crippling recession. Hollande promised to help the stricken state by increasing French tourism, and by encouraging
French investment when state-owned Greek industries are sold off.

Markets:
US stocks rose yesterday, sending the Standard & Poor’s 500 Index to its highest level in five years, on optimism over
dealmaking and data showing rising investor confidence in Germany. The S&P 500 has climbed 7.3% in 2013 as US
lawmakers agreed on a compromise federal budget and earnings topped analyst estimates. The FTSE 100 also broke
new ground, reaching its highest level since the financial crisis struck.

Overnight, Asian shares scaled their highest levels since August 2011 after an improving global economic outlook
whetted investor appetite for risk, while the yen firmed amid doubts over Japan’s commitment to drastic reflation.
Today, European stocks are seen opening broadly flat, consolidating yesterday’s strong gains as investor’s digest a
bumper crop of results and economic data, and gauge the sustainability of the rally.

Currencies:
The euro rose for a second day before data today that economists said will show consumer confidence in the currency
bloc improved. This follows data from yesterday showing investor confidence in Germany, the region’s biggest economy,
jumped to a three-year high.

Energy:
West Texas Intermediate crude fluctuated after rising the most in a week as Enterprise Products Partners LP said
supplies through its Seaway pipeline will increase, helping reduce a glut in the US Midwest.

Commodities:
Gold advanced, snapping a five-day losing run on speculation that the US central bank may prolong stimulus in the US
amid a weaker-than-expected recovery. Gold has slumped 4.1% this year on signs economies from the US to China are
Improving, and after filings showed billionaire investors including George Soros pared holdings last quarter.

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