1. Chinese spies stole the plans for the Joint Strike Fighter. Australia’s shelling out somewhere in the vicinity of $15 billion for 72 of the controversial Lockheed Martin F-35 Lightning II aircraft, but there might be some rethinking to do after German magazine Der Spiegel claims Chinese cyber spies know all its secrets. Leaked documents claim roughly “50 US Congress libraries” worth of data was stolen. The fifth generation F-35 is expected to join Australia’s Air Force in 2020. The leak confirms the Australian Government has been informed of the “serious damage” caused by Chinese cyber-espionage against the JSF.
2. To the markets and in Asia Friday, USDJPY reversed course but rose all the way back to 117.50. That didn’t help the Nikkei, which fell 1.43%, 245 points to 16,864, but Nikkei futures on the CME are up 270 points for the March contract to 17,070 bid. The Hang Seng finished down 1.01% to 24,104. Stocks in Shanghai continue to march to the beat of their own drum, rising 1.19% to 3,376 Friday before rallying again in Futures trade. Perhaps the 4.3% fall in Chinese house prices, realised yesterday, might slow recent strength in Shanghai, which is up 8.6% over the past month.
3. Locally the ASX was down 32 points for a loss of 0.6% on Friday closing at 5,299. But Friday night’s trade was far more positive with the SPI 200 March futures up 76 points – approximately 1.2% – to 5,307 bid (futures terms). With the US out for Martin Luther King holiday tonight, Australian stocks get 36 hours of clear air which could be very beneficial in terms of positive price action.
4. The Aussie received some support but hasn’t rallied yet, although Westpac’s New Zealand based strategist Imre Speizer wrote in a note over the weekend that “Positive near-term momentum remains intact” and he is “targeting 0.8295 during the days ahead”.
5. And the number one challenge facing Australian business is… labour costs. When it comes to profitability anyway, with the Economist Corporate Network’s “Asia Business Outlook Survey 2015″ reporting that:
Almost 40% of companies cite this issue as having a negative impact on profit margins. Had we asked this question two years ago, respondents in Australia might well have listed currency movements as being the number one challenge, given that the strong dollar had not only hurt exporters, but had also made many imports cheaper than locally-produced goods and services.
6. To data news and volatility is the word of the week, in the wake of the SNB’s decision to abandon the franc’s floor, so that in turn makes for a huge week of releases. Chinese GDP for Q4 tomorrow is even more important and market-sensitive than usual – an undershoot (or even an overshoot) could cause huge ructions. The other big events for the week internationally are the ZEW survey in Germany, also tomorrow, and the Bank of England’s MPC cut release. But the week hinges on the ECB interest rate announcement Thursday night where Mario Draghi is widely expected to finally take the plunge into full blown QE. Here’s Westpac’s excellent calendar of events and data releases for the week.
7. Sharks everywhere! Yesterday it was the turn of Sydney’s other famous beach, Manly, to shut down as lifeguards sounded the shark alarm. That follows an eight-day closure at Newcastle while a monster 5m great white patrolled offshore and an attack at Mollymook on the NSW south coast where a 17-year-old had his hand nibbled. If only there were some way we could chart how the sightings are affecting beach attendances. Oh, wait:
8. How did you spend your Sunday evening? Catch up on some reading? Opt for herbal tea or seltzer water instead of red wine? Then you’re a little way down the path of doing exactly what successful people do to avoid the “Sunday night blues”. Laure Vanderkam wrote a whole book about it, and we’ve pulled out the 11 Things Successful People Do On Sunday Nights for today’s 10 Things self-help lesson.
9. Australian golfer Robert Allenby was kidnapped on Friday night. In the mid-2000s, Allenby dominated Australian golf, including a stellar 2005 in which he won the Australian Open, Masters and PGA Championship. He spends most of his time these days on the US PGA Tour, but after missing the cut at the Sony Open in Hawaii on Friday, he went to a wine bar with his caddie. He woke up 10km away, bashed, robbed of his wallet, phone, cash and credit cards and dumped in a park. “I only know this part because a homeless woman found me and told me she saw a few guys pull up and throw me out of the car,” he told the Brisbane Times, adding that he just felt “lucky to be alive”.
10. The Socceroos are into the Asian Cup quarter-finals. They’ll plan China in Brisbane on Thursday, but if they win that, they’ll most likely have to beat Japan if they want a grand final appearance on their home turf. They dropped a chance to beat South Korea on Saturday, going down 1-0 in a rare home ground defeat. Skipper Mile Jedinak will hopefully be well enough to return for the match against China, while Mathew Spiranovic will have to miss out after receiving a second yellow card, and a one match suspension.
BONUS ITEM: The world is getting warmer, faster. Fact.
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