Local shares are trading slightly higher, with soft Chinese data overshadowed by expectations for fresh stimulus from the Federal Reserve and for Europe to make progress in tackling its debt crisis.

5.15pm: That's all for today, folks. Thanks for reading this blog.

Here's our evening wrap of today's session.

4.55pm: Here's how some of the blue chips performed today:

  • BHP: +1.5%
  • Rio: +4.4%
  • ANZ: +0.1%
  • CBA: -0.2%
  • NAB: -0.2%
  • Westpac: -0.4%
  • Fortescue: +7.25%
  • Woolies: -1.4%
  • Wesfarmers: -0.5%
  • Telstra: flat
  • Qantas: +1.6%

4.43pm: The Australian dollar held most of the hefty gains made in the past two sessions, as soft data in China and the United States fuelled hopes of more stimulus.

Profit-taking shaved the Aussie to currently $US1.0350, from a high of $US1.0388 before midday. But it is still up nearly two cents since it hit a two-month trough of $US1.0165 last week, having risen as high as $US1.0401 on Friday.

The currency was weighed somewhat by soft trade data from China, though that was offset by expectations of more spending by Beijing on infrastructure.

China's imports from Australia actually rose 10 per cent in August, from the previous month, a surprise given all the talk of slumping iron ore shipments.

Still, annual growth in imports from Australia did slow further to 2.9 per cent, against an average between January and May of around 21 per cent, says Adarsh Sinha, a strategist at Bank of America Merrill Lynch in Hong Kong.

"It's not massive negative news for the Aussie dollar as such, but it's not great news either. It's still running at a much weaker pace than we saw in the first half of the year."

4.32pm: Commodities trader Glencore has laid out its revised $US36 billion all-share bid for miner Xstrata, raising its offer as expected but warning it would not improve the terms further.

Glencore, the miner's largest shareholder, confirmed its offer was now 3.05 new shares for every Xstrata share held, up from 2.8. The deal provides for Glencore's own chief executive, Ivan Glasenberg, to take the helm of the combined group, again as expected, but only after an interim period under Xstrata's Mick Davis.

"Glencore confirms that it is an all-share merger, and it will not increase the merger ratio further," Glencore said "The increased merger ratio represents a substantial premium for a company with a 34 per cent shareholder."

4.20pm: The materials sector was the big winner of the day, rising 2.3 per cent on hopes of more stimulus in China. Gold stocks jumped 3.6 per cent. Weighing on the market were financials, down 0.3 per cent, and consumer staples, down 1.8 per cent.

4.15pm: The market has closed slightly higher, recovering from losses in the wake of weaker than expected Chinese import numbers. The benchmark S&P/ASX200 index rose 8 points, or 0.2 per cent, to 4333.8, while the broader All Ords gained 9.2 points, or 0.2 per cent, to 4358.

4.05pm: European stock index futures are pointing to a dip after last week's rally, although losses could be limited by rising expectations of a new round of stimulus measures by the Federal Reserve in the wake of lower-than-expected monthly jobs data.

Futures for Euro STOXX 50, for Germany's DAX and for France's CAC are down 0.2 per cent.

Dow and S&P500 futures are also down between 0.2 and 0.3 per cent.

3.57pm: China steel futures are up for a second day, supported by hopes that Beijing's approval of more than $US150 billion in infrastructure projects will resuscitate steel demand, providing fuel for a recovery in iron ore prices.

Price offers for imported iron ore cargoes in China rose by up to $US4 per tonne today, after the benchmark rate jumped by $US2, or 2.3 per cent, to $US89 a tonne on Friday.

"There's more interest now from buyers to get iron ore cargoes even at prices slightly higher than previous deals. Sentiment's better," an iron ore trader in Shanghai told Reuters.

3.43pm: Nathan Tinkler, the largest shareholder in Whitehaven Coal, won more time to defend himself against a bid to hold his companies in contempt of court over a failed property deal with Mirvac Group.

Mirvac wants a judge to hold Buildev Group and Ocean Street Holdings in contempt after they failed to comply with an August 1 order to complete the purchase of industrial land north of Sydney by September 1.

New South Wales Supreme Court Registrar Andrew Musgrave today gave Tinkler’s lawyers until September 18 to prepare their defense.

3.34pm: With just a short while to go before the close of market, CMC Markets senior trader Tim Waterer says investors are remaining optimistic despite weak China Data:

  • Financial markets have adopted quite a nonchalant approach when it comes to seeing dismal economic data in recent times. Pear-shaped macro indicators are brushed aside in the belief that central banks stand at the ready to ease the pain with fresh bouts of stimulus. It has not quite gotten to the stage where bad news is welcomed with open arms but traders are not exactly getting too down in the dumps on signs that the US jobs market is approaching stall-speed, mainly on the belief that Bernanke will have his hand forced in regards to injecting QE3. 
  • The Chinese Trade Balance data took a little steam out of the AUD with the drop in imports (-2.6%) overshadowing the better looking overall number. The softer imports fall in line with recent Chinese indicators pointing to domestic weakness, so this was enough to dim the mood on Asian markets in afternoon trading. 
  • The performance of the Australian sharemarket was nothing to write home about, with the mining stocks seemingly the only ones finding something to cheer about given the better showing from commodity prices. A slight move higher in the Iron Ore price and the fiscal stimulus package announced by the Chinese government on Friday also propped up the big mining stocks. Gold shares were among the day’s stand-outs, following the surge in the price of the precious metal in anticipation of more monetary easing from the US Federal Reserve. Apart from the moves higher by the miners, the broader market was in slumber mode to start the week with traders mostly non-committal in nature until we hear from Ben Bernanke later in the week. The potential onset of US stimulus really does hold the key for any designs the ASX200 may have on making a sustained run through the 4400 level.

3.24pm: Here's a look at how markets around the region are performing:

  • Nikkei(Japan): -0.04%
  • Shanghai: +0.42%
  • Taiwan: +0.65%
  • South Korea: -0.10%
  • Singapore: -0.13%
  • New Zealand: +0.30%

3.15pm: Shares in Australian gas exploration company Pancontinental Oil & Gas NL surged two-thirds after the company said its joint venture consortium had discovered a significant gas deposit off the coast of Kenya.

The discovery in the L8 licence area, about 70 kms off the coast of Malindi, is the first substantive hydrocarbon discovery offshore Kenya, Pancontinental said in a statement on Monday.

"We are delighted to prove that there is a working hydrocarbon system offshore Kenya. Further work continues to evaluate the size of the discovery," Chief Executive Barry Rushworth said.

Shares were up 7.5 cents, or 65 per cent, to 19 cents.

2.58pm: CLSA Asia-Pacific Markets, the brokerage unit of Credit Agricol being bought by China’s Citic Securities, is itself seeking acquisition targets as rivals struggle amid the financial crisis, and Australian assets may be on the shopping list.

“There could be an acquisition somewhere,” Chief Executive Officer Jonathan Slone told Bloomberg. “We’re looking at some really interesting venues right now.”

The financial industry was “too bullish” early last year, and investment banks and brokerages that got too big are now being forced to pare back or exit, Slone said. Deutsche Bank is among those retrenching as it eliminates as many as 1,900 jobs.

Slone cited the US and Australia as growth areas for his brokerage.

“There’s a lot of pain on the street right now and it’s a good time to look at opportunities in these places,” he said, without being more specific.

2.42pm: China’s trade figures and domestic indicators released yesterday extended the recent feebleness in August, ANZ says in a note.

  • China’s trade is unlikely to achieve the 10 oer cent growth target in 2012. To offset the external weakness, policy makers will stimulate domestic demand so as to maintain the growth momentum.
  • The soft trade data also means there is little room for the RMB to appreciate further. We maintain our forecast that the RMB will likely trade within a band of 6.30-6.35 for the remainder of this year.

One interesting snippet on the numbers: On a volume basis, imports of iron ore increased by 5.7% y/y, while crude oil and soybean imports declined by 12.5% and 2.0% respectively. However, on a value basis, iron ore and crude imports fell sharply by 20.9% and 20.5%, reflecting the price drop.

2.38pm: As ANZ boss Mike Smith heads offshore to brief the bank's international shareholders, it's always worth noting what the big issues are to overseas investors.

This time it is clearly all about addressing questions over funding, BusinessDay's Eric Johnston writes. ANZ has spent a large slab of the bank's 55-page slide pack reassuring investors over the health of the bank when it comes to raising the funds needed to back its lending book.

The comments come as ANZ and several of its rivals have returned to the market in recent weeks to raise funds using covered bonds. It also follows a period of volatility through European money markets given uncertainly linked to a possible Greek exit from the euro.

ANZ, for its part has told investors it has hit its funding targets for financial 2012 and is now eyeing getting a head start for next year's funding task - meaning it needs to tap money markets for between $20 billion and 25 billion.

ANZ also points out it has a lower structural funding gap to its rivals - (the difference between lending and deposits). This means ANZ has a lower reliance on wholesale offshore funding than its rivals, giving it a competitive advantage.

2.29pm: South Korea, meanwhile, has unveiled new stimulus measures worth $US5.2 billion to boost domestic demand as its export-driven economy struggles with the global economic downturn.

The finance ministry says it will push for fiscal support worth 5.9-trillion-won - 4.6 trillion won for the remainder of this year and 1.3 trillion won for next year.

The new support, which followed a package of 8.5 trillion won in June, does not require an additional budget as it comes mostly in the form of reducing taxes and expanding social welfare programmes.

"There are growing concerns about our sagging economic power," Finance Minister Bahk Jae-Wan says, citing weak global markets and the prolonged eurozone debt crisis.

2.22pm: Asian markets are mostly higher with weak data from China and the United States fuelling expectations for fresh moves to boost growth in the world's two biggest economies.

Tokyo has slipped 0.13 per cent, with a slightly stronger yen compounding figures showing the Japanese economy grew at a slower pace than initially thought.

Hong Kong stocks are up 0.40 per cent, Shanghai has gained 0.30 per cent and Seoul is 0.10 per cent higher.

2.15pm: A trader accused of losing $US2.3 billion in a fraud at Swiss bank UBS goes on trial in London in a case expected to once again put the supervision of bankers under the spotlight.

Ghanaian-born equities trader Kweku Adoboli denies two counts of fraud and two of false accounting between 2008 and September last year.

The son of a Ghanaian former United Nations official, Adoboli worked for the global synthetic equities division at UBS in the City of London financial district.

The 32-year-old, who was privately educated in Britain and attended Nottingham University, was arrested in London on September 15 last year on suspicion of the fraud.

He had been involved in buying and selling exchange traded funds, which track different types of stocks or commodities such as precious metals.

2.07pm: The Singaporean government has admitted that the island state will be impacted by Qantas’s decision to move its regional hub to Dubai but says it can replace the lost airline and passenger flows.

Singapore’s Minister for Trade and Industry Lim Hng Kiang says Qantas’s change of direction was a commercial decision.

‘‘Of course (it) will have some impact on us. But at the same time, there are air slots that Qantas can use and the air traffic in Asia and South-East Asia is growing.

‘‘So what we may lose in terms of the European flow, we hope to rebuild again.’’

The minister is in Australia for the 7th Singapore-Australia Joint Ministerial Committee meeting.

Last week, Qantas announced its flights to Europe would now stop over in Dubai, under a 10-year partnership signed between the carrier and Middle East airline Emirates.

1.59pm:  Online activist group GetUp has lodged a formal complaint over claims made in an industry advertisement for coal seam gas.

A television ad by the Australian Petroleum Production and Exploration Association (APPEA) says the CSIRO believes groundwater is ‘‘safe from coal seam gas’’ activities. But the national scence body said last week the claim was not true.

‘‘At no time has CSIRO made such a statement, and nor do the results of CSIRO research support such a statement,’’ a spokesman says.

GetUp has lodged the complaint with the Advertising Standards Bureau, labelling the ad ‘‘misleading’’.

1.50pm: Here are some of the movers today: Fortescue Metals is up 3.8 per cent after iron ore shipments from Port Hedland to China, Australia's largest export market, rose by 11.8 per cent in August.

Qantas is up 2.1 per cent after announcing a 10-year alliance with Dubai's Emirates last week.

Chief executive Alan Joyce says Qantas' international unit will break even by 2015.

1.41pm: Almost a third of the economy faces a digital "big bang" over the next three years, pushing companies as diverse as retailers, banks and real estate agents to rethink their strategies, a new report says.

The report by Deloitte Access Economics, published today, assesses which parts of the economy are likely to see a change of more than 15 per cent in key metrics such as revenue or cost structures due to the digital revolution.

It found 32 per cent of the economy would experience such a change over the next three years, a scenario it dubbed a "big bang" on a "short fuse".

Here's the full story

1.30pm: The perennial bonds versus equities debate continues, with cash invesmtent complicating the debate in Australia, says NAB Private Wealth investment strategist Nick Ryder:

  • The biggest question for investment markets is whether and when investors are willing to move from sovereign bonds into other assets.
  • Most commentators are of the view the bond rally has become over-extended and therefore are recommending other asset segments.
  • This has yet to be translated into action, but is likely to be a relatively meaningful transition.

However, he is still cool on fixed income and even Australian equities when it comes to asset allocation, he is warmer on cash (even with term deposit rates pulling back and international equities).

1.13pm: The dollar has also reacted to the numbers, slipping to $US1.0369, from $US1.0385.

1.11pm: It's especially the fall in import numbers that seems to be worrying the market, which has just slumped to the day's low, down 0.2 per cent.

1.08pm: Chinese trade numbers are in and they're offering a mixed picture. The trade surplus rose to $US26.7 billion, well outperforming estimate of a $US19.5 billion rise.

However, imports dropped 2.6 per cent over the year, while the market had tipped a 3.5 per cent rise.

Exports were broadly in line with expectations, rising 2.7 per cent.

1.03pm: Xstrata isn't the only big miner to announce job cuts in the coal industry today: BHP Billiton will axe 300 positions at its Gregory Crinum coal mine near Emerald, Queensland.

BHP said the decision followed a review that had "determined that the Gregory open-cut mine production was no longer profitable in the current economic environment of falling prices, high costs and a strong Australian dollar".

12.48pm: The market is trading pretty much flat, despite strong gains among miners. The materials sector is up 1.9 per cent, gold stocks are soaring 3.4 per cent, but financials are down 0.2 per cent and consumer staples ahve fallen 1.8 per cent.

The strong performance of resources stocks is related to Friday’s stimulus announcement by China of $160 billion in infrastructure spending and government statements that it would act to maintain steady growth. It came after many mining stocks last week were punished as iron ore prices plummeted.

‘‘I think there is some correcting in the short term due to some excessive negative valuations of iron ore stocks,’’ CMC Markets chief market analyst Ric Spooner says.

‘‘There had been queries about whether China would step up to the plate again for this sort of stimulus and it seems to indicate there is an intention to do so.’’

12.29pm: Interesting lunchtime read: Amid a dismal economy, increasing numbers of Irish companies are looking overseas, rallied by a government which is desperately trying to reduce its own debt.

12.23pm: The Australian dollar is trading close to the day's highs at $US1.0384, buoyed by the weak US jobs figures and a plan by the European Central Bank (ECB) to support the region’s weaker economies.

RBC currency strategist Michael Turner says weak US employment figures provided stimulus for the Australian currency on Friday.

‘‘The Aussie’s been pretty well-supported since the employment data,’’ he says.

The much-watched data showed that only 90,000 jobs were added to the US job market in August, compared to economists’ predictions of 130,000.

‘‘The FOMC (US Federal Open Market Committee) are likely to ease in some shape or form,’’ he says.

The FOMC, which meets on Thursday and Friday, is expected to announce a fresh round of quantitative easing.

12.19pm: Bendigo and Adelaide Bank’s executives had their bonuses scrapped in the 2011-12 financial year as the bank’s net profit dropped by 43 per cent.

The bank’s annual report shows chief executive Mike Hirst’s remuneration in the year to June 30 was $2.35 million, down from $3 million in the previous year.

Excluding the value of shares yet to be awarded under long term incentive plans, Hirst took home $1.8 million in pay. No cash bonuses were paid to any directors or executives in 2011-12 as the bank’s earnings failed to meet the minimum criteria set by the board.

12.05pm: While we're with Xstrata, chief executive Mick Davis is said to be ready to quit the company after a $35 billion takeover by Glencore at a price beneficial to shareholders, Bloomberg is reporting, citing a person familiar with the situation.

Chief financial officer Trevor Reid also is prepared to step down provided Glencore makes an offer fair to shareholders of the mining company, said the person, who asked not to be identified because the information isn’t public.

Glencore, the owner of 34 per cent of Xstrata, last week raised the amount of stock offered for the rest of the company by 9 per cent, demanding that its CEO Ivan Glasenberg replace Davis minutes before shareholders were due to vote on what would be this year’s biggest merger.

‘‘Mick Davis has engendered a lot of goodwill for Xstrata investors and there would be a strong reaction should he leave the merged group,’’ says Tim Schroeders of Pengana Capital.

12.03pm: Xstrata Coal is cutting 600 employee and contractor jobs as it deals with the twin challenges of a sharp fall in coal prices and a persistently strong Australian dollar.

The company would not break down the job losses by each site, but it said the focus was on scaling back high-cost production at some of its mines. Some jobs in its corporate offices in Sydney and Brisbane will also be cut.

11.56am: Recent RBA rate cuts have not managed to bolster confidence in the housing sector, CommSec economist Savanth Sebastian says:

  • I think the rate cuts will help over the longer term but, at the moment, I think it comes down to weak consumer confidence and investors remaining relatively cautious in this environment.
  • There is a stand-off between buyers and sellers; buyers are still holding on for cheaper (home) prices while sellers are expecting a little more return.

11.46am: The dollar hardly reacted to the housing finance data and is currently trading at $US1.0371.

11.38am: Some more disappointing housing data: the number of home loans approved in July fell 1.0 per cent to 44,804. That was from a downwardly revised 45,278 in June.

Economists had expected housing finance commitments to be flat in July.

Total housing finance by value fell 1.8 per cent in July seasonally adjusted, to $20.050 billion.

Investment lending fell 2.7 per cent in July, after a revised 4.4 per cent rise in June, while owner-occupier lending fell 1.4 per cent, from a 0.9 per cent rise.

11.27am: Commodities are putting on a strong performance this morning, with spot gold climbing to $US1738.52, its highest since late February.

Copper is also rallying, up 2.25 per cent to hit a four-month high.

Oil is a bit of a laggard, however, as the price for a barrel of WTI slips 0.2 per cent to $US96.27.

11.24am: Weak economic data in the form of a disappointing 96k rise in US non-farm payrolls, have pushed markets back into the “bad news is good news” dynamic, by lifting the chance of further Fed stimulus, ANZ says.

US unemployment has flat-lined around 8.1%-8.3%, but labour force participation slid further in a trend that is flatters the official unemployment rate.

China’s data dump over the weekend also confirmed slowing growth, at, or a little below expectations. Industrial production rose 8.9% y/y in August, (+9.2% in July).

China has announced a series of infrastructure approvals equivalent to around 1 trillion yuan. Our China team also expects the PBOC to lower reserve requirement ratios by 150bps this year.

11.16am: Markets have climbed back to a gain of 0.2 per cent. Materials are still leading the way with a gain of 2.08 per cent. Industrials and energy stocks are the only other two sub indices which are higher - up 0.45 per cent.

Consumer staples are at the back of the pack, dragged down by Woolworths. Here are the biggest sliders among the consumer staples stocks:

  • Woolworths: -3.42%
  • Goodman Fielder: -1.8%
  • Wesfarmers: -0.6%
  • Treasury Wine Estates: -0.4%

11.09am: There has been some movement in the Target fake cosmetics story. Target says it "just doesn't know" if MAC Cosmetics sold at its stores are counterfeit or not.

Global make-up company Estee Lauder has launched legal action against Target, claiming the retailer sold fake cosmetics at its stores and online from at least August 8. In the Federal Court this morning, David Studdy, SC, for Target, said Estee Lauder's claims that the products were fake were just allegations at this point.

"We just don't know and we're obviously making urgent inquiries", he said. More here.

11.02am: Here's a chart showing Chinese economics growth since 2001. It highlights why there is so much talk about whether or not the Chinese government will move to stimulate the economy. As the chart shows, the current slowdown is a big one by recent standards and is yet to show signs of abating:

10.54am: Trading in shares of Glencore International has been suspended, according to a filing on the Hong Kong exchange.

The company said in a statement that the suspension was pending the release of information relating to its proposed all-share merger of equals with Xstrata plc. No further details were immediately available.

Glencore hammered out a revised $35 billion bid for miner Xstrata in intense weekend negotiations and is set to detail its new offer to the market as early as Monday, days after proposing 11th-hour changes to save the deal

10.45am: Tokyo stocks opened 0.21 per cent lower on a strong yen and profit-taking, brokers said. The Nikkei 225 index at the Tokyo Stock Exchange fell 18.46 points to 8853.19.

Meanwhile, Japan's economy expanded in the second quarter at half the pace the government initially estimated, underscoring the risk of a contraction as Europe's debt crisis caps exports.

Gross domestic product grew an annualised 0.7 per cent in the three months through June, the Cabinet Office said in Tokyo today, less than a preliminary calculation of 1.4 per cent. The median forecast of 26 economists surveyed by Bloomberg News was for a revised 1 per cent gain. 

10.39am: The big banks are putting in a patchy performance today:

  • CBA is 0.2% lower to $54.49
  • ANZ is 0.21% lower to $24.11
  • NAB is 0.08% higher to $25.08
  • Westpac is 0.12% lower to $23.58

10.36am: Here's a preview of the week ahead with BusinessDay's Michael Pascoe.

10.30am: Shares in builder Lend Lease are down about 2.6 per cent to $8.22 after it was announced that senior executives at construction company Abigroup have stood aside while investigations into discrepancies in profit reporting.

Abigroup’s owner, development firm Lend Lease, said the misreporting of profits and costs in two Abigroup projects would not impact its financial position or its outlook.

‘‘We take seriously any potential reporting and compliance issues, and are committed to resolving this matter fully and as quickly as possible,’’ Lend Lease chief executive Steve McCann said in a statement.

Executives responsible for oversight and management of Abigroup have stood aside while Lend Lease investigates the matter.

10.26am: And to the early sliders on the ASX200:

  • GWA Group: -5.51%
  • Envestra: -5.35%
  • Goodman Fielder: -3.7%
  • FKP Property: 3.45%
  • Lynas: -3.05%
  • IOOF: -2.79%

10.22am: Here are the early gainers on the ASX200:

  • Medusa Mining: +6.84%
  • Ramelius: +6.41%
  • Discovery Metals: +6%
  • Bathurst Resources: +5.8%
  • Resolute Mining: +5.57%

10.17am: Looking at the ASX200 sector by sector, it's pretty clear where this morning's strength lies - it's all about the miners. Materials and industrials are the only sectors higher at this stage:

  • Materials: +2.27%
  • Industrials: +0.24%
  • Consumer staples: -1.05%
  • Telecoms: 0.5%
  • Info tech: 0.48%
  • Financials: -0.45%

10.13am: The benchmark S&P/ASX200 index was up 6.8 points, or 0.16 per cent, at 4332.6, while the broader All Ordinaries index was up 7.2 points, or 0.17 per cent, at 4356.

On the ASX 24, the September share price index futures contract was up five points at 4336, with 7377 contracts traded.

10.11am: And resources stocks are also leading the ASX200:

  • Coalspur: +6.8%
  • Medusa: +6.2%
  • Discovery metals: +6%

10.09am: The big miners are leading the early advance:

  • BHP: +2.2%
  • Rio: +4.4%
  • Fortescue: +5.7%

10.06am: Early take - Shares up 0.2 per cent in early trade as markets open.

9.57am: The big miners are set for a strong day after performing well at the end of last week on Wall Street. Rio added 12.3 per cent from Wednesday to Friday while BHP added 6.54 per cent over the last two days of the week as the China iron ore price stabilised. It gained $US2 on Friday to $US89.

9.54am: In local news this morning, the head of building products maker Boral’s US operations has been appointed the company’s new chief executive.

Mike Kane will take over at Boral from October 1, replacing interim chief executive Ross Batstone. Mr Batstone has been in the role since May, after former chief executive Mark Selway lost the support of Boral’s board and stood down.

Mr Kane joined Boral in February 2010 as president of Boral USA, where he has has worked for the past two-and-a-half years.

9.51am: Looking ahead this week:

  • Tuesday: NAB business confidence and conditions
  • Wednesday: Westpac consumer confidence, ABS dwelling starts for the June quarter
  • Thursday: Myer releases full-year results

9.47am: Here’s HSBC from a note this morning on yesterday’s Chinese data:

Industrial production slowed marginally in August, in line with our expectations. This means that the recovery in infrastructure spending has not yet fully offset the downward pressure from exports and property markets. 

Delving a bit deeper into the industrial production numbers, HSBC found reason for hope:

The breakdown suggests signs of stabilisation: growth of heavy industries ticked up slightly to 9% y-o-y in August from 8.8% y-o-y in July, growth of electricity production rebounded to 2.7% y-o-y in August from 2.1% y-o-y in July, cement and car production also improved. However, growth of steel products decelerated sharply to 1.4% y-o-y in August from 6.5% y-o-y in July and growth of light industries slowed to 8.6% y-o-y in August from 10.1% y-o-y in July.

9.43am: With the China trade balance numbers due to arrive around midday, there's a bit of context to the numbers.

Fresh data out yesterday showed China's industrial output grew at the slowest pace in three years, while President Hu Jintao said economic expansion faces “notable downward pressure,” signaling that officials may need to add further to stimulus after approving subway and road projects.

9.40amThe market is awaiting Chinese trade data due around noon, AEST. Another set of weak numbers would add more pressure for Beijing to take swift policy action.

The authorities encouraged markets last week by announcing $US150 billion-worth of infrastructure projects.

"Expect a soft trade data report, where there is a material risk that export growth slips into the negative in August, temporarily weakening the AUD," Annette Beacher, head of Asia-Pacific Research at TDSecurities, told Reuters.

9.38am: The Aussie dollar has been a beneficiary of the weakness in the US jobs market. As bets on US stimulus rose, pressuring the US currency, the local unit gained. It was recently buying $US1.037, up from $US1.023 early on Friday. It was also recently buying 81 euro cents, 65.74 pence and 81.05 yen.

9.35am: In the US on Friday, new data showed the economy added 96,000 jobs in August, down from a revised gain of 141,000 in July. While the unemployment rate fell to 8.1 per cent from 8.3 per cent, that resulted from more people dropping out of the work force. As a result, investors increased bets that the Fed, which meets on Wedneday and Thursday, will announce another bout of stimulus measures.

9.32am: Aussie shares have mixed leads to the start the week. Futures point stocks higher, but some soft Chinese data yesterday, including a weak reading of industrial production, could keep a lid on things.

For a comprehensive look at this morning’s business news, check today’s need2know. Here are this morning’s key market links:

  • SPI futures are 18 points higher at 4349
  • The $A is higher at $US1.037
  • In the US on Friday, the S&P500 rose 0.4% to 1437.92
  • In Europe, the FTSE100 rose 0.3% to 5794.80
  • China iron ore rose $US2 to $US89 a metric tonne
  • Gold rose $US34.90 to $US1740.50 an ounce
  • WTI crude oil rose 89 US cents to $US96.42 a barrel

9.30am: Good morning. Welcome to the Markets Live blog for Monday.

This blog is not intended as investment advice

BusinessDay with agencies