ECONOMIC NEWS

Dow Jones Industrials +0.56% at 12,086.02

Nikkei 225 -0.15% at 9,435.01

HK Hang Seng +0.39% at 22,915.28

Europe back in the spotlight

Portugal - Last night Portugal's Prime Minister Jose Socrates resigned after losing a crucial vote on austerity measures. The failure to pass the austerity measures increase the likelihood that the country will require an international bailout The Finance Minister stated in a speech that rejecting the austerity package would mean that the country would struggle to "bear on our own" current financing problems.

Spain - Bank downgrades: Moody's this morning cut the ratings on 30 Spanish banks according to an emailed statement citing heightened financial pressure.

China - PMI for March rose to 52.5 from 51.7 last month. According to HSBC, China's manufacturing growth is accelerating enough that even if the government increases interest rates again, the economy will maintain a reasonable level of growth.

• According to the World Bank, China's economy will probably become the world's largest by 2030 in terms of nominal GDP taking into account market exchange rates.
• Deputy Governor of the People's Bank of China, Yi Gang, stated that he is confident that the government will be able to keep consumer price inflation at or below 4% this year.

US - Expectations ahead of a report due for release later today suggest orders for long lasting goods probably increased last month implying that production gains and the manufacturing sector will remain the driving force behind the economic recovery.

Japan - Contaminated food concerns accelerated yesterday as Tokyo's municipal government warned that the city's water supply had become contaminated.

• Reports this morning suggest that steam can be seen rising from the Fukushima plant as workers continue to battle to restore power at the stricken plant. Euro News is reporting that power cables have now been attached to all six reactors but as of yet no water has been pumped. A spokesman for the International Atomic Energy Agency stated that the situation "remains a serious concern"
• Evidence that supply disruptions are worsening in the US as industries from electronics to aviation experience problems.

UK - The Budget yesterday offered little in the way of surprises as the Chancellor maintained that the road to recovery was best served by retaining plans for fiscal consolidation.

Ivory Coast - Increasing pressure on the UN. Nigerian President Goodluck Jonathan has urged the international community to take more decisive action stating "We must not make the mistake of understating the threat it poses to the peace and security of the entire sub-region"

• Backers of Incumbent President Laurent Gbagbo have called for a weekend of visual support for the President.

Burkina Faso - Reports are emerging that ten people were injured after soldiers at a military base in the capital Ouagadougou protested against the arrest of colleagues. Bloomberg is reporting that several businesses were ransacked during the demonstrations and that a number of local Banks were closed amid concerns over security.

Currency - The euro weakened this morning against the dollar and the yen on the back of the Moody's rating cuts and the problems facing Portugal. The dollar is slightly off this morning against its most traded counterparts.

US$1.410/eur vs $1.415eur yesterday. Yen80.92/$ vs 80.82/$ SAr6.93$ vs 6.90/$ $1.617GBP vs 1.635/GBP

COMMODITY NEWS

Precious metals:

Gold US$1,440/oz vs US$1,430/oz yesterday - Prices have moved up to a record this morning as sovereign debt problems in Europe recapture investor attention and bolster safe haven demand.

• SPDR gold trust holdings remain at 1,214.87 (39,088moz) Current value US$56,210bn

Platinum US$1,755/oz vs US$1,736/oz yesterday -

Palladium US$750/oz vs US$738/oz yesterday -

Silver US$37.62/oz vs US$36.25/oz yesterday - Similarly safe haven demand is supporting silver today helping the metal rise to a 31 year high.

Rhodium US$2,375/oz vs US$2,375/oz yesterday -

Base metals:

Copper US$9,774/t vs US$9,539/t yesterday -

• Spot fees at Chinese copper smelters have doubled on the back of Japan's earthquake. Bloomberg is reporting that fees are being offered at as much as US$150/t compared to US$70-$80 previously.

Aluminium US$2,643/t vs US$2,604/t yesterday -

Nickel US$27,310/t vs US$26,550/t yesterday -

Zinc US$2,425/t vs US$2,370/t yesterday -

Lead US$2,725/t vs US$2,693/t yesterday - Lead futures in China rose today on expectations for strong demand and as producers attempted to hedge risks locally.

Tin US$31,649/t vs US$29,250/t yesterday -

Energy:

Oil US$115.66/bbl vs US$115.78/bbl yesterday - Prices are up this morning on the back of intensifying military action on Libya. Angela Merkel has called for an oil embargo on the country in an effort to stop funds getting to the regime.

Gas US$4.389/MMBTU vs US$4.275/MMBTU yesterday

Uranium US$60.00/lb vs US $60.00/lb last week - Prices reported by UX Consulting remain unchanged this week

• Extract Resources has echoed comments made by other uranium miners, stating that China will remain focused on expanding its nuclear power program regardless of the problems experienced in Japan.

Other:

Iron Ore - According to the China Chamber of Commerce of Metals, Minerals and Chemicals, spot iron ore prices will remain high this year as supply remains controlled by a number of large suppliers. Estimates suggest that Chinese steel mills will start to return to the market imminently in order to bulk up stocks.

Rare Earths - According to Reuters China's prices for rare earth exports moved through the US$100,000/t mark for the first time in February. Prices this time last year were around the US$14,400 mark. The soaring values have coincided with a collapse in export volumes emerging from China. Exports for February are around the 750tonnes mark.

Mining this week:

Carbine Resources* (CRB AX) 33c, mkt cap A$34m - Nazala gold assays return up to 6.03g/t from geochemical sampling

Baobab (BAO LN) 36p, mkt cap £61m - Independent estimation of 200-250mt at Muande iron & phosphate target

Gem Diamonds (GEMD LN) 224p mkt cap £379m - Confirms review of potential value enhancing opportunities

Greenland Minerals (GGG LN) 35p, mkt cap £50m - Update for takeover offer for Auzex Resources

Amur Minerals (AMC LN) 12p, mkt cap £31.6m - Announces subscription agreement to raise £2.5m

Centamin Egypt (CEY LN), 127p Mkt cap £1,380 BUY - Centamin appoints Ed Haslam, ex Lonmin to the board

ENRC* (ENRC LN) 905p mkt cap £11,639m - Profit doubles to $2.19bn for FY 2010

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