:00:03. > :00:13.sale of debt in Italy and Spain and job losses, now time for the latest
:00:13. > :00:18.
:00:18. > :00:22.financial news with world business Hello, a warm welcome. The
:00:22. > :00:28.headlines - Spain prepares to auction 5 billion euros of bonds in
:00:28. > :00:33.a major Tess of the investors risk appetite, Itpetite, Itelling debt.
:00:33. > :00:40.Singapore, China's inflation rate down to a 15-month low which leaves
:00:40. > :00:46.the Government more room the slowdown impact exports. Royal Bank
:00:46. > :00:56.today as it moves away if investment bvestment ber pressure
:00:56. > :01:03.
:01:03. > :01:06.from its main shareholder the UK bond auction for 2012 for Italy and
:01:06. > :01:11.Spain the two eurozone economies causing most concern. Between them
:01:11. > :01:18.they hope to sell as much as 17 billion euros worth of debt in a
:01:18. > :01:22.few hours Tim and the Italian new Prime Minister urges investors to
:01:22. > :01:27.reward Italy for its austerity efforts but needing to pay more
:01:27. > :01:33.than 15 billion in bonds by the end of March will borrowinl borrowin
:01:33. > :01:37.continue to surge if the new government? This is a rare view of
:01:37. > :01:42.the anonymous-looking trading room
:01:42. > :01:46.bonds. Centres like it across Europe work over time. It all kicks
:01:46. > :01:49.off today and tomorrow when Spain and Italy try to borrow billions in
:01:49. > :01:55.the next of some 60 sovereign auctions but wary markets will be
:01:55. > :01:59.watching over the effect few weeks. The stay liquid and solvent whole
:01:59. > :02:05.countries have no alternative but to keep rolling over their bonds at
:02:05. > :02:09.auction and if they can not afford do that their only at sieve toys
:02:09. > :02:13.seek a bailout and probably default as well. European bond prices and
:02:13. > :02:18.the cost of borrowing, the yield, become a very public measure of a
:02:18. > :02:23.country's ability to keep serviceing its debts without going
:02:23. > :02:26.bust.. The one the market focuss on are the Italian an Spanish bond
:02:26. > :02:32.Australia's because the borrowing costs have been riding aggressively
:02:32. > :02:35.over the last few months. The Italian borrowing cost is reaching
:02:35. > :02:40.a troubling level where it is possible it could be unsustainable
:02:40. > :02:44.if they continue to borrow for these rates. But people are looking
:02:44. > :02:48.at the French and German auction t reason they look at the French
:02:48. > :02:51.auction is because the crisis appears to be spreading from the
:02:51. > :02:56.privy countries to the core countries. That is a worry because
:02:56. > :03:00.the Celine Dion survival in its present form depends on successful
:03:00. > :03:08.auctions where commercial lenders are prepared to fund countries at
:03:08. > :03:12.prices their treasuries can afford to repay. Key to success of the
:03:12. > :03:16.debt auctions of course is the role of the European Central Bank which
:03:16. > :03:20.has given the region's financial sector ultra-cheap loans in the
:03:20. > :03:23.hope it will put the money back into the bond markets. We will hear
:03:23. > :03:27.if the ECB today they hold their first meeting to decide on interest
:03:27. > :03:31.rates this year. Most market watchers expect it to hold interest
:03:32. > :03:41.rates at their record low of a per cent but what else might we hear
:03:42. > :03:44.
:03:44. > :03:47.from them? Let's talk about the ECB meeting. I assume rates will remain
:03:47. > :03:53.on hold, they will take it as a breather to see what is going on?
:03:53. > :03:57.Is that the idea? That is it. We have had two exciting meetings in
:03:57. > :04:03.November and December. Marrow entering office with two rate cuts
:04:03. > :04:06.and now it is time for breather to see how the economy evolves and how
:04:06. > :04:10.the financial sector evolves and what the Celine Dion crisis is
:04:10. > :04:16.doing. In the next two months we should see another rate cut.
:04:16. > :04:19.terms of what they are watching, on December 21 they gave banks in
:04:19. > :04:26.Europe access to very, very cheap loans. There was a big uptake of
:04:26. > :04:32.that. What has been going on with that money since then? It is hard
:04:32. > :04:36.to say. We will see the inter--pang market, the market where -- inter-
:04:36. > :04:40.bank market where they lend each other money is stuck. We have the
:04:40. > :04:47.bank frost the peripheral countries that need money at the ECB and we
:04:47. > :04:57.have called bank the core Celine Dion companies which have the like
:04:57. > :04:58.
:04:58. > :05:03.This be German money market papers. Earlier this week we had an auction
:05:03. > :05:08.of a six-month paper from Germany with a negative interest rate.
:05:08. > :05:12.Obviously the ECB would want that money to be used to help today's
:05:12. > :05:16.bond sale in Spain, Italy selling bills and bonds tomorrow. That is
:05:16. > :05:22.not happening then? Is that what you are saying? Obviously the bank
:05:22. > :05:27.rgs go for the fear factor keeping it in a says flavour ever place for
:05:27. > :05:35.the ECB? We did see in 2008 and 2009 that it happened but this time
:05:35. > :05:40.around it is different. Many banks need to improve their Capitol -
:05:40. > :05:45.capital positions. Eurozone bonds are not risk-free which means banks
:05:45. > :05:52.will be hesitant the invest in the assets they do not consider as
:05:52. > :05:55.what is happening at the moment. When we hear if the European
:05:56. > :06:00.Central Bank in terms of their rate decision and what else they have to
:06:00. > :06:04.say we make sure you know. Let's talk about Royal Bank of Scotland
:06:04. > :06:07.because today it is expected to announce major job cuts of between
:06:07. > :06:14.3,000 and 4,000 investment chip banking positions which could be
:06:14. > :06:18.going. RBS is 83% owned by the UK government after it pumped in some
:06:18. > :06:22.$70 billion to keep the group afloat during the financial crisis.
:06:22. > :06:28.It is now under pressure the focus more on domestic and business
:06:28. > :06:32.banking and move away from more risky operations. Here is the BBC's
:06:32. > :06:38.business editor on what today's restructure is likely to involve.
:06:38. > :06:41.What it is eliminating is its business in share trading, advising
:06:42. > :06:45.companies on takeovers. What is traditionally known as equities
:06:45. > :06:50.business used to be done stock brokers and traditional merchant
:06:50. > :06:54.banks. The reason it is getting out of that business is because it is
:06:54. > :06:59.not really Division One player and it is not making any money there.
:06:59. > :07:04.This is a bank that needs to become more profitable because it is under
:07:04. > :07:12.a fair amount of pressure to get its profits and share price up so
:07:12. > :07:17.we as taxpayers can get our money back. Our business editor. Has
:07:17. > :07:23.China tamed inflation? They have their latest inflation numbers out
:07:23. > :07:27.and it looks encouraging, doesn't it? Very encouraging and they have
:07:27. > :07:32.basically painted to a certain extent, an inflation level this the
:07:32. > :07:38.mainland has not seen in more than year. The consumer price index
:07:38. > :07:46.easing to a 4.1% in the month of December after peaking at the high
:07:46. > :07:52.of 6.5% last July. For all of 2011 though prices rose 5.4% which is
:07:52. > :07:55.still higher than Beijing's target level of 4%. When you talk to the
:07:55. > :08:00.economists they say prices may ease further in the first quarter of
:08:00. > :08:04.this year and with inflation slipping, monetary policy makers
:08:04. > :08:12.are now prioritising the economic showdown which could force them
:08:12. > :08:16.basically did make more cuts in 2012. The reduction could be 2%
:08:16. > :08:20.through the course of this year and many expect at least a half a per
:08:20. > :08:26.cent interest rate reduction from the Central Bank before the lunar
:08:26. > :08:29.new year holidays next week. Basically, possible say makers want
:08:29. > :08:33.to fine-tune policy to be sufficient to keep the economy on
:08:33. > :08:40.stable expansion path. After the inflation index has been released
:08:40. > :08:48.markets will now focus on that key GDP data which will be unveiled in
:08:48. > :08:53.less an week's time. China goat in the fourth quarter may have slowed
:08:53. > :08:58.from 9.1% the previous quarter. will keep an eye on this as well.
:08:58. > :09:02.Let's squeeze in some more stories. The biggest shake-up in in her net
:09:02. > :09:08.addresss in more than two decades gets under way later. From today it
:09:08. > :09:17.will being possible to enter any word as a top-level domain name.
:09:17. > :09:22.Familiar endings could be joined by the likes of dot Pepsi and dot Nike.
:09:22. > :09:27.The web regulator believes it has steered its 185,000 per application
:09:27. > :09:31.will help discourage cyber squatters and opportunists. The