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Tuesday, February 9, 2010


Rebound in commodity prices boosts most Asian markets
Most Asian markets advanced Tuesday, helped by a return to profit by Switzerland's UBS and a rebound in commodity prices. China's Shanghai Composite gained 0.5%, Hong Kong's Hang Seng Index added 1.2% and Taiwan's Taiex jumped 2%. South Korea's Kospi Composite rose 1.1%, India's Sensex closed up 0.7% and Singapore's Straits Times advanced 1.9%. Meanwhile, Japan's Nikkei 225 slid 0.2% and Australia's S&P/ASX 200 gave up 0.4%. The Wall Street Journal (09 Feb.)

Fed prepares for cautious withdrawal of fiscal stimulus
The Federal Reserve is preparing to talk publicly about its strategy for withdrawing liquidity from the U.S. economy, after flooding it with trillions of dollars. Central bank policymakers and private-sector economists said the process will be tricky and dangerous, coming at a time when unemployment is projected to remain historically high. The Washington Post (09 Feb.)

Analysis: Goldman Sachs helped Greece hide size of deficit
The Greek government went to Goldman Sachs for help in concealing the size of its budget deficit and used a derivatives deal to keep the EU in the dark, according to Der Spiegel. The deal allowed Greece to circumvent an EU rule that limits the size of a budget deficit, the magazine reported. "At some point the so-called cross currency swaps will mature, and swell the country's already bloated deficit," according to Der Spiegel. Goldman inflated the money Greece received by basing the swaps on "fictional exchange rates." Der Spiegel (Germany) (English online version) (08 Feb.)

Greek debt crisis drives euro to 8-month low against U.S. dollar
Increasing concern that the EU will not take decisive action on Greece's sovereign-debt crisis took the euro to its lowest value against the U.S. dollar in eight months and close to an 11-month low against the Japanese yen. The fall came after EU President Herman Van Rompuy did not make direct reference to Greece in comments about an EU summit Thursday. European Central Bank President Jean-Claude Trichet considers the summit important enough to leave a meeting of policymakers in Australia a day early to attend, a central bank spokeswoman said. Reuters (09 Feb.)

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