monday excerpts -

- Teck Cominco accepted an investment stake from China.
- Alcoa reports tomorrow morning after US close. (-34 cents consensus)
- Suncorp's sale becomes complicated, as ACCC may halt any of the big 4 in acquiring its banking assets.
- North Korea launches 7 Scuds over the weekend.


Data watch:

2:30am GMT ANZ Job advertisements
3pm GMT USD Non manufacturing ISM - expected 46.0

My take:

Teck Cominco's sale of a stake of circa 17% to Chinese sovereign funds marks the start of the Chinese attempts to diversify its source of raw materials around the globe, instead of relying on its traditional suppliers, BHP, Vale and Rio Tinto. Teck Cominco is the global leader in coking coal, with significant reserves and also a copper and zinc producer of some note. This frees up some captial for Teck to go on a growth outlook and potentially looking at Ozminerals as an acquisition (Prominent Hill will be an excecllent fit for Teck). Downside is there may be some fallout from BHP/Rio/Vale due to competition from Teck's coking coal supplies to China (although coking coal does not represent a big portion of the three miners' earnings).

Alcoa's results mean that Alumina will be under focus today. Expect heavy positioning plays (long/short) and watch the options market for out of the ordinary sizes for clues.

Suncorp's situation means that the only feasible buyer for its banking assets now is Bank of Queensland. When there is one logical buyer present, the market tends to mark down the premium very quickly, however once it does, it may be an opportunity to buy into a divestment strategy, as sum of parts will be eventually worth more. White knuckle ride for sure, but if Suncorp does tank by 8-10% on the back of this unconfirmed report the Australian has shot out as its headlines, it becomes the case of buying the company and getting its banking assets for free.

North Korea wants war. Buy USD - risk aversion to continue. XJO to open a little stronger and fade away. Asian markets may come under pressure.

That's my take, do as you please - as always, just my opinion, could be completely the opposite.