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Friday financial focus

Friday Headlines:
• Global: Non-Eu countries prop up G20
• Eurozone: Non-Eu countries prop up G20
• USA: Double-boost for economy
• Ireland: Successful sale of new debt
• Japan: Parliament approves top banking jobs
• Eurozone: Analysts warn over dire 2013
• Markets: Key data
• Currencies: BoE Governor says recovery is in sight
• Energy: Spain could supply its own natural gas
• Commodities: Regulator suspects gold and silver pricing
• Focus on: A budget to target tax, spending, red tape and zombies

Global: Non-Eu countries prop up G20
The G20 countries saw their economies grow by 0.5% in the final three months of last year, as growth outside Europe offset weakness on the troubled continent. GDP in the group of 20 influential states rose 0.5% in the fourth quarter of 2012, data from the Organisation for Economic Co-operation and Development said. Among the G7, all European countries – Italy, Germany, France and the UK – experienced economic contraction in the last quarter. Outside Europe, G20 states such as China, Indonesia and India recorded the sharpest expansions, at two per cent, 1.5% and 1.3% in their respective economies.

Eurozone: Non-Eu countries prop up G20
The EU Parliament yesterday rejected the EU budget after the 27 leaders of the bloc’s member states agreed to cut spending by 3.3%. MEPs used powers handed to them in the 2009 Lisbon Treaty to vote overwhelmingly against the deal, demanding a more flexible approach to spending and the right to carry any surplus over to future budgets. While accepting the slight cut in the headline figure, MEPs also demanded the legal right to review spending in 2017.

USA: Double-boost for economy
Hopes for a strong economic recovery in America received a double- boost on Wednesday, with news that consumers have hiked their spending while US firms are stocking up on goods as confidence returns. Retail sales jumped 1.1% in February compared to the first month of the year, the US Census Bureau said – taking them 4.6% higher than a year earlier.

Ireland: Successful sale of new debt
The Irish state successfully sold €5bn of new debt yesterday, taking its biggest step yet towards exiting its European bailout later this year. Yet elsewhere in the Eurozone, Italy had to pay its highest three-year borrowing costs since December as it pays the price for political paralysis that triggered a credit rating cut last week.
Japan: Parliament approves top banking jobs
Shinzo Abe’s nominations for the top three jobs at Japan’s central bank have been approved by parliament, triggering a new era of more aggressive monetary easing in the world’s third-largest economy. The upper house waved through the appointments of Haruhiko Kuroda as governor, and Kikuo Iwata and Hiroshi Nakaso as his deputies. They will take up their new roles after a national holiday on March 20th.

Eurozone: Analysts warn over dire 2013
Reinforcing Bundesbank president Jens Weidmann’s denial that the Eurozone crisis was over, analysts yesterday forecast that 2013 would be even harsher than 2012 for the Eurozone economy. The euro area will suffer a 0.7% hit to its economy in the coming year, Morgan Stanley said, on top of the 0.5% its GDP shrunk last year. The forecast is worse than the 0.5% decline Morgan Stanley predicted in November, before top bloc figures including European Central Bank president Mario Draghi and European Commission boss José Manuel Barroso said the worst of the crisis was over.

Markets: Key data
The FTSE 100 rose to a new five-year closing high yesterday, led by financials, helped by further signs of strength in the US economy. Some bet on more gains from the index, up almost 11% this year and around 6% shy of an all-time closing high of 6,930.20 set in December 1999, months before the dot-com bubble burst.
The Dow Jones industrial average extended its recent winning streak to 10 days and the S&P 500 closed in on a record high yesterday as investors were encouraged by data that showed the labor market’s recovery was improving.

Overnight, Hong Kong and China shares rose, led by banking and railway counters on restructuring of the mainland’s vast rail operations, but were still set to end the week with the heaviest losses in three weeks.

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