News Headline Summary

News Stories of Note from over the Weekend

Europe

- Spanish foreign minister Garcia-Margallo said Spain will cope without the ESM, but it is essential that the ECB has the power to influence financial markets and lower Spain's borrowing costs according to a report. (Newswires) Separately the Bank of Spain governor Linde said he estimates Spain's current account will be broadly balanced in 2012 with deficit between 0.5%-0.6% of GDP. (Efe)

- ECB's Asmussen said the G7 and G20 are platforms to discuss currency issues and that exchange rates should be markets based. (Newswires) ECB's Visco said markets are watching Italy closely and Italy must not lower its guard. (Newswires)

- A radical new option for the financial rescue of Cyprus would force losses on uninsured depositors in Cypriot banks, as well as investors in the country’s sovereign bonds, according to a confidential memorandum prepared ahead of today's meeting of eurozone finance ministers. (FT)
Full article: http://www.ft.com/cms/s/0/1d17a320-736f-11e2-9e92-00144feabdc0.html#ixzz2KX8YurZf

UK

- The Bank of England will cut its growth forecasts in this week’s quarterly inflation report dousing recent hopes that the UK was heading back to recovery. (Telegraph) In related news David Smith at The Sunday Times wrote that a renewed surge in oil prices threatens to push inflation even further above the official 2% target this year, and the Bank of England is set to concede this week that it has little chance of hitting that target over the next two years. (Sunday Times)

US

- President Barack Obama will put job creation at the centre of his second term agenda, laying out a broad vision for robust economic growth and easing the strains on the US’s middle class when he delivers his fifth state of the union address on Tuesday. The president will also warn that the “sequester”, the USD 1.2trl in automatic spending cuts due to kick in on March 1st, poses a grave threat to the US’s slow recovery. (FT)
Full article: http://www.ft.com/cms/s/0/49c48e9c-73a6-11e2-9e92-00144feabdc0.html#ixzz2KX9COjOs

FX

- G7 Finance Ministry officials have been in talks this week to consider issuing a statement on exchange rates amid rising fears of a global currency war, however it is not yet clear if enough nations back the proposal to avoid competitive devaluations according to G7 officials. (Newswires)

Geopolitical

- Syrian President Bashar al-Assad will remain in power and won't be toppled according to Iraq's Prime Minister Nouri al-Maliki. (Newswires)

- South Korea will pre-emptively strike against North Korea if it shows intent to use a nuclear weapon, a top South Korean general says (SMH)

11 Feb 2013 - 06:12 - - Source: Newswires/Sunday Times/Financial Times/Sydney Morning Herald

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