Overnight Headlines:

• Greece continued to dominate headlines overnight. Reports suggested that a deal was close overnight, but talks were again delayed another day.
• Late in U.S. trading, Bloomberg reported that they obtained a draft of an agreement involving the IMF, EU and ECG regarding the Greek debt deal. The draft claimed:
  • Greece will cut 15,000 state jobs this year
  • Minimum wage will be cut by 20%
  • Medical spending will be cut, and
  • Auxiliary pension funds will be merged
  • According to reports, the ECB agreed to exchange Greek government bonds at less than face value in an effort to further reduce the nation’s debt load.
    • The U.S. Treasury Department sold US$24b in 10-year notes at a yield of 2.02% with bidders offering to buy 3.05 times the amount of debt sold.

Resources Snapshot:

• The Zambian government has announced plans to audit all mining companies in a bid to retrieve up to US$1b in back taxes.
• China’s imports of gold through Hong Kong for 2011 reached ~428t, 260% higher than 2010 and a clear record. This is despite Dec’11 imports being down 60% from a year earlier to 38.6t.
  • Japan is aiming to cut dysprosium (a heavy rare earth) consumption by 30% over the next two years to around 200tpa.
    • FYI: Dysprosium trades at US$1,420/kg (FOB China) and has risen over 1,100% since 2009.
    • FYI: ARU’s Nolans Bore REE resource includes 0.33% Dy, equalling 4.3% of their potential revenue.

Markets:

• DOW JONES: Up 0.04% (or 5.75 points) to 12,883.95. Markets in the U.S. took negative leads from Europe on the back of a further delay in the Greek government formulating a new debt deal. However, major indexes, including the Dow, clawed back losses to end marginally higher. No significant economic data was released throughout the session. A report by the National Association of Homebuilders claimed that 98 U.S. housing markets are gaining momentum. Over 55% of Dow components rose with Bank of America leading the gainers with a 3.4% rise. United Technologies and HP both gained over 1.7%. The other end saw American Express, McDonalds and Home Depot all falling over 0.6%.
• FTSE 100: Down 0.24% (or 14.33 points) to 5,875.93. European markets, including the FTSE 100, continued another session noting falls on the back of an absence of a Greek deal. The banking sector, after rising yesterday, was mixed with Barclays and RBS falling while Lloyds jumped 1.5%. Despite a minor gain from Rio, the mining sector was mostly lower with BHP, Fresnillo, Anglo American and Randgold Resources falling. The energy sector was varied. Shell rose 0.2% while BG Group slipped 1.3%.

Overnight Summary: