Chart of the week: lower risk exposure by French banks not causing investors in commodity houses to panic just yet.

Chart courtesy of Reuters.com

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Friday links

– Cotton prices. Are they in for another trouncing in 2012?

– Chinese aluminium smelters may idle one-third of their capacity in 2012.

– Commodity markets braced for a headwind?

– UK recession and aftermath now longer lasting than the 1930’s.

– In defence of the golden parachute.

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Chinese inflation drops to 4.1% in December, 0.1% above market expectations

Chinese inflation dropped to 4.1% in December, a 15 month low and just above the official CPI target of 4% (although the average over the past 12 months is 5.4%).

Markets in Asia were supported by investor expectations that this will enable the Chinese authorities to loosen monetary policy (a recent poll by Reuters showed that analysts expect a 200 basis point cut in rates over 2012). However, a government economist has been reported as suggesting that inflation is likely to rebound in January and that a large policy loosening is unlikely.

The National Bureau of Statistics is due to publish GDP data on 17th January.

Click here for a preview of other high impact market data affecting oil and cotton markets this week.

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