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Midweek financial focus

Global Markets: US stocks rebound despite IMF warning
Asia Overnight: Stocks advance for first time in three days
Today’s Markets: European stocks expected to rise
Global Growth: IMF lowers its forecast
Global Inflation: UK above target for 40th month but EU & US lower
UK: IMF advises George Osborne to lighten up on austerity
Germany: Investor sentiment dips
USA: Factory output drops
Currencies: Draghi’s pledge persuades traders
Energy: Brent falls below $100 a barrel
Commodities: Gold wipes out $560bn from central banks
Property: London still leads the way

Global Markets: US stocks rebound despite IMF warning
US stocks rebounded even after the IMF trimmed its global growth
forecast and urged European policy makers to use “aggressive”
monetary policy as a second year of contraction leaves the euro
area’s recovery lagging behind the rest of the world.

Asia Overnight: Stocks advance for first time in three days
Asian stocks advanced for the first time in three days as new-home
construction in the US jumped more than forecast, the IMF raised its
forecast for Japanese growth and the yen weakened.

Today’s Markets: European stocks expected to rise
European stocks are expected to rise today after three straight
sessions of falls, as investors balance the muted growth outlook
against the chance of further monetary easing from central banks.

Global Growth: IMF lowers its forecast
The global economy will expand 3.3% this year, less than the 3.5%
forecast in January, after 3.2% growth in 2012, the IMF said, cutting its
prediction for this year a fourth consecutive time. The IMF sees the
Eurozone shrinking 0.3%, compared with a 0.2% retreat in January,
with France joining Spain and Italy in contracting.

Global Inflation: UK above target for 40th month but EU & US lower
Inflation stayed above the Bank of England’s 2% target for the 40th
straight month in March, official data showed yesterday. The
consumer prices index (CPI) grew 2.8% over the year to March, the
Office for National Statistics said, as in February. The Eurozone CPI
grew 1.7% over the year to March, down from 1.8% in February and
2.7% a year earlier. Hardest-hit Greece actually saw 0.2%, potentially
slowing the real wage falls economists believe necessary to rebalance
their competitiveness. US CPI growth fell below its 2% target to 1.5%
over the last 12 months – despite continued blasts of accommodative
monetary policy. This came after the exactly on-target two per cent
inflation logged in February.

UK: IMF advises George Osborne to lighten up on austerity
The IMF called on the chancellor to consider lightening up on his
austerity drive in the face of a weak private sector. As the fund
downgraded its UK growth forecast by 0.3% (more than for any other advanced economy) it adopted a stronger line on
deficit reduction, urging the coalition government to contemplate “plan B” without delay.

Germany: Investor sentiment dips
German investors’ economic sentiment dropped sharply in April, figures showed yesterday, erasing much of the gains
made so far this year. The headline Zew indicator crashed from 48.5 in March to 36.3 this month, the Zew think tank said,
back closer to where it was in January, though still above any result from 2012 or 2011.

USA: Factory output drops
US manufacturing output dipped in March, figures showed yesterday, but separate numbers showed the housing
recovery steaming ahead. Factories produced 0.1% less in March than in February, the Federal Reserve said, while
mining output fell 0.2%. Only a 5.3% monthly jump in utilities output worked to produce an overall 0.4% gain for industrial
output.

Currencies: Draghi’s pledge persuades traders

Mario Draghi’s pledge to safeguard the euro has done more to persuade traders than the potential for lower interest
rates. The 17-nation currency has climbed an average 2.1% against the dollar, yen and sterling since the ECB president
left the door open to further cuts in the main refinancing rate on April 4th.

Energy: Brent falls below $100 a barrel
Brent crude fell below $100 a barrel for the first time since July on signs economic growth will slow, curbing demand.
West Texas Intermediate oil was little changed before a report that may show a US supply gain.

Commodities: Gold wipes out $560bn from central banks
Investors are dumping gold funds at the fastest pace in two years in favor of equities, compounding a slump that has
wiped $560 billion from the value of central bank reserves. Gold futures in New York slumped 17% this year through
yesterday, the worst start since 1981, after a 9.3% drop on April 15th that capped the biggest two-day decline since
January 1980.

Property: London still leads the way
London’s housing market grew 5.9% in the year to February, up 5.5% over the 12 months to January. By contrast,
average UK house price growth slowed from 2.2% over the year to January, to 1.9% over the year to February, having
risen to 3.3% in December.

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