Overnight Headlines:

• Germany’s ZEW Index, a measure of investor sentiment, rose to 5.4 in Feb’12, the highest reading since Apr’11.
• Britain’s CPI for Jan’11 fell to 3.6%, down from 4.2% the previous month, as predicted by economists.
• Moody’s put Britain, France and Austria on negative outlook.
• Moody’s also cut Spain’s rating by two-notches, and Italy’s and Portugal’s by one-notch.
• The FT reported late Monday that Germany and other European countries may not fully approve the €130b Greek aid package, due to concerns over whether Greece can complete its austerity program.
• The monthly Bank of America – Merrill Lynch survey found a net 26% of respondents are now overweight equities, up from 12% the previous month. Overweight cash has reduced from 27% to 13%.

Resources Snapshot:

• Legislation to allow uranium exploration in NSW will be introduced to Parliament after the state cabinet agreed to overturn the long held ban.
• The proposed Obama budget includes a 5% gross mining royalty on federal lands and a hardrock abandoned mined land fee on all lands.

Markets:

• DOW JONES: Up 0.03% (or 4.24 points) to 12,878.28. U.S. markets took mostly negative leads from Europe and spent the session trading lower on poor economic data. Impressively, the Dow consolidated losses late in the session to end relatively flat. The key U.S. headline pointed to retail sales. Sales for Jan’12 rose a seasonally-adjusted 0.4%, lower than the forecast 1%, due largely to poor automobile sales. Just over half of the Dow components rose with HP (+1.1%), Boeing (+1%) and Caterpillar (+0.7%) leading the way. The largest fallers included Bank of America (-3.2%), Disney (-1.8%) and Alcoa (-1.1%).
• FTSE 100: Down 0.10% (or 5.83 points) to 5,899.87. European markets, including the FTSE 100, spent local trading hours in the green before turning lower on weaker than expected U.S. data. The banking sector outperformed the index with Lloyds and Barclays gaining 2.3% and 1.2% respectively. However, RBS fell over 5%. Additionally, most miners gave back previous gains with BHP and Rio falling 0.5% and 3.1% respectively. Gainers included Fresnillo and Randgold Resources. The energy sector was mixed with BG Group falling 0.1% while Shell gained 1.5%.

Overnight Summary: