need2know: Bear territory, China data ahead

It’s a big day for China data: 4th Qtr GDP; December industrial production; retail sales and fixed asset investment. Photo: Sanjit DasLocal shares are poised to fall towards bear market levels with oil hovering near 12-year lows while China’s key economic growth data is out later today.

What you need2know

SPI futures down 35pts at 4782

AUD 68.75 US cents, 80.52 Japanese yen, 62.97 Euro cents and 48.15 British pence

Financial markets in the US are closed Monday for a public holiday.

In Europe, Stoxx 50 -0.58%, FTSE -0.42%, CAC -0.49%, DAX -0.25%

In London, BHP -1.01%, Rio -0.67%

Spot gold +0.01% to $US1089.55 at 2.07pm New York time

Brent crude -1% to $US28.66 at 2.29pm New York time

Iron ore +3.7% to $US42.66

What’s on today

Malcolm Turnbull concludes his official two-day visit to the US. Rio will release its fourth-quarter operations review at 8.30am Sydney time. Westpac consumer confidence January.

China 4th Qtr GDP. China December industrial production, retail sales, fixed asset investment.

UK inflation for December. German ZEW for January. US homebuilder optimism index for January. US Congressional Budget Office annual budget and economic outlook.

Earnings: Bank of America, Morgan Stanley, Netflix, IBM, Delta Air Lines.

Stocks in focus

Deutsche Bank maintains its “hold” recommendation for Tabcorp Holdings (ASX:TAH) and has a target price of $4.70.

Deutsche Bank upgrades its recommendation for Suncorp Group (ASX:SUN) to “buy” and has a target price of $13.10.


The yen dropped from close to a four-month high after China’s central bank helped calm investors’ nerves by strengthening the yuan fixing by the most in almost a month.

Bank of England policy maker Gertjan Vlieghe said he’s “patient” on interest rates and wants to see evidence of stronger price pressures before tightening policy.

The beaten-down Canadian dollar has to fall even further to support real economic activity, according to JPMorgan, putting pressure on the Bank of Canada to cut its policy rate on Wednesday.


Brent oil earlier extended its decline below $US28. Prices pared losses after the Organisation of Petroleum Exporting Countries, which supplies about 40 per cent of the world’s oil, predicted production outside its members would drop this year by 660,000 barrels a day. That deepened the decline from its previous estimate by 270,000 barrels a day.

Speculators’ short position in West Texas Intermediate crude, or US oil, rose 15 per cent in the week ended January 12, data from the US Commodity Futures Trading Commission show. It’s the highest in records dating back to 2006.

Nickel led base metals higher in London on optimism that China will see an increase in demand and its economy will avoid a hard landing. The metal used to produce stainless steel rose as much as 3 per cent to $US8650 a metric ton.

United States

Markets closed for the Martin Luther King Jr holiday.


The Stoxx Europe 600 Index dropped to a 13-month low, with banks declining on concern the quality of their assets may harm profits.

Eleven of the Stoxx 600’s 19 industry groups fell. Oil and gas companies rose 0.1 per cent, while makers of household goods rose 0.7 per cent. Total gained 1.1 per cent and BP added 0.7 per cent. Banca Monte dei Paschi di Siena tumbled 15 per cent, a drop its chief executive said was unjustified. UniCredit lost 5.4 per cent.

Ericsson led technology shares higher, adding 2.9 per cent after Nordea Bank raised its recommendation to buy from hold.

What happened yesterday

Australian stocks fell yet again on Monday, although not as badly as many had feared. The market quickly bounced off its lows, as losses in the big four banks were pared, with the ASX 200 finishing 0.7 per cent lower at 4858.7 and the All Ordinaries 0.7 per cent lower at 4911.8.

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