Wary ahead of China data 11:09am: More on Paladin, one of this morning's big movers. Managing director John Borshoff said he was "delighted" to complete the sale, which he said would "largely be applied to debt reduction." Deutsche had speculated last week that Paladin would need to conduct an equity raising within six months had today's sale not been achieved. The sale has not yet been approved by China's National Development and Reform Commission, but Mr Borshoff said those approvals were expected by mid year. The NDRC is the same organisation that hampered Hanlong group from taking over Sundance Resources in recent years. 10:57am: If 2013 was a good one for investors in the big banks, it was particularly kind for those with money in National Australia Bank, the AFR notes. Shares in NAB rallied 39 per cent in 2013, ahead of ANZ, which gained 29 per cent, and Commonwealth Bank and Westpac, which were up 25 per cent. A sound performance in Australia, improving results from its problematic British-based business and a sense that NAB shares presented better value than the other banks after years of under-performance drove the gains. As investors weigh up their holdings in the big four in 2014, the question is whether NAB can repeat the performance this year and for many analysts, the swing factor could be the bank's business in Britain. While NAB's Clydesdale and Yorkshire banks in the UK have been a weight on the group's share price performance for some time, improving economic conditions in Britain are raising the prospect that NAB could finally sell the businesses this year in a move that would likely be welcomed by most investors. "NAB remains committed to its plan to sell the UK franchise, but not at any price," Macquarie analyst Michael Wiblin says in a report. Given an improving UK macro [economic environment], it may well be that it can get a better price this year. But as JPMorgan analyst Scott Manning points out, much of NAB's business in the UK is based in the north of England and Scotland, where the economic recovery is less evident. 10:48am: Here's a bit more on the Australian dollar and why it slipped to a new 3½-year low early Saturday. It fell as low as 87.64 US cents on Saturday morning and was buying 87.73 US cents early today. "It's really the run that we saw last week where the US dollar tracked up from its post-payrolls slump and that's been a key catalyst that's weighed on for the Aussie," says Commonwealth Bank currency strategist Peter Dragicevich. The key economic data set to determine the direction of the Australian dollar today is the spate of Chinese data released at 1pm AEST. The data will include four-quarter GDP, retail sales, industrial production and fixed asset investment. Dragicevich says the bearish attitude of the market means that even if the China data comes in better-than-expected, the possible bounce in the Australian dollar would be unlikely to be sustained. "Conversely if the data does disappoint, it will give further impetus to keep the Aussie under downward pressure," he says. 10:43am: As mentioned, uranium miner Paladin energy and gold miner Silver Lake Resources are early winners, with shares in both companies up over 11 per cent. A raft of other gold miners are in the top performers, with the All Ords gold index surging 4.8 per cent. Super Retail Group has regained a smidgen after its big sell-off last week. Forge shareholders have had another rough morning, and the flight from consumer discretionary names continues: Domino's Pizza, Aristocrat Leisure, Echo Entertainment, and JB Hi-Fi are all lower. The best and worst performers this morning. 10:36am: A private gauge of inflation jumped by the most in almost three years in December driven largely by higher prices for food, petrol and tobacco, perhaps suggesting some upside risk for official data on inflation due later this week. The TD Securities-Melbourne Institute's monthly measure of consumer prices rose 0.7 per cent in December, from November when it increased by 0.2 per cent. The annual pace accelerated to 2.7 per cent, from 2.4 per cent, and into the upper half of the Reserve Bank's long-term target of 2 to 3 per cent. The government measure of consumer prices (CPI) is due on Wednesday and any surprise on the high side would likely dampen speculation about another cut in interest rates from the RBA. However, much of the jump in the TDMI gauge in December was due to one-off influences, including an unseasonably large 5.8 per cent spike in prices for fruit and vegetables and higher taxes on tobacco. Petrol also climbed 5 per cent in December, after falling the two previous months. 10:26am: Shares in gold miner Silver Lake Resources are up 13.4 per cent after releasing a production report for the December quarter. The company upgraded its guidance for full-year production from 180,000 to 200,000 ounces of gold to 205,000 to 220,000 ounces of gold. Silver Lake produced a little over 151,000 ounces in the most recent financial year to June 30. The price of the yellow metal has stabilised at around $US1250/ounce after the steep falls last year, and investors have re-rated gold mining stocks in recent weeks. 10:16am: Paladin Energy shares are up 10 per cent this morning, to 61 cents, after the uranium miner completed a crucial asset sell-down over the weekend. Paladin confirmed this morning that it had completed a sale of a 25 per cent stake in its flagship Langer Heinrich mine in Namibia to a subsidiary of China National Nuclear Corporation. The sale will generate $US190 million for Paladin, which has been facing severe balance sheet pressures on the back of weak uranium prices. Paladin shares rose close to 13 per cent on Friday, after the miner announced it had refinanced several debt facilities. The stock could continue that surge this morning, with the Langer Heinrich sell down being eagerly awaited for more than eight months. 10:10am: The ASX 200 has started the trading week ever-so-slightly lower. Mining stocks have started the way they finished on Friday, bucking the early trend to post some gains. Gold stocks are up almost 1 per cent. 10:03am: The VIX, or volatility index, is a widely tracked US indicator of fear in the market - the higher the number the greater the levels of panic. Right now the VIX suggests investors aren't very worried about anything. Its current read of 12.4 is about as low as it's been in the past five years. It got as high as 80 at the peak of the GFC. The index is calculated based on the market price of options used to protect against large moves in the sharemarket. Its low reading now could be a sign of complacency among investors. The VIX "fear index" is trading at low levels 9:54am: Here are five top bets that currency hedge funds are pursuing for 2014 (no surprise to see the short Aussie dollar bet in there): Long dollar versus yen. Now the Federal Reserve's tapering of its bond-buying programme has finally begun, the move is likely to boost the dollar as investors are attracted to higher Treasury yields. And with the Bank of Japan expected to provide even more stimulus this year, hedge funds expect this trade to keep on delivering. Short Australian dollar versus US dollar or New Zealand dollar. After a huge bull-run in the wake of the credit crisis that took it well above parity with the U.S. dollar, hedge funds have rushed to short the Aussie in the belief it will suffer as China's demand for commodities cools. Long sterling versus the euro. The pound was one of the surprise packages in the second half of last year as the UK's economic resurgence brought forward expectations of an interest rate rise. Long dollar versus the Canadian dollar. Another very popular bet with hedgies, this has paid off as the "loonie" hit a four-year low last week, after data showed the country unexpectedly shed jobs last month. Long Mexican peso versus emerging market currencies. Managers are split on the outlook for emerging market currencies as they try to assess the impact of Fed tapering. But many like the Mexican peso, thanks to the country's strong growth and improved credit rating. Read more at Reuters. 9:47am: Australia's largest banks are trading at the most expensive levels since before the GFC on bets a mortgage lending recovery will allow them to increase dividend payouts. Shares of the Big Four led by CBA have rallied more than 30 per cent since November 2011 when the central bank began the first of eight interest-rate cuts to bolster economic growth. The lenders trade at an average of 2.1 times the net value of their assets, the highest since 2007 and a 75 percent premium over the MSCI World Bank Index, data compiled by Bloomberg show. Investors are betting bank profits will increase - despite an economic slowdown following an end to the nation's mining boom - as record-low borrowing costs allow lenders to stoke demand for mortgages and boost dividend yields that are already the highest in the developed world. Australian banks account for six of the eight highest dividend yields in the 91-stock MSCI gauge, beating overseas rivals from HSBC to Wells Fargo, the data show. "The Australian banking sector is going to continue to show nice earnings growth," Alex Tedder, a New York-based fund manager who helps oversee about $18 billion in stocks including Commonwealth Bank shares at American Century Investments. Yields are still fairly high and you've got a good setup for creating sustained dividend growth that will continue. 9:36am: Today's main focus will be on China's data dump, with GDP, industrial production and retail sales among the numbers investors will be watching for clues on the health of the world's second largest economy. After key guidance figures came in weak and amid the ongoing China pessimism, IG's Chris Weston says the GDP figure is likely to be interpreted as bad for local resources stocks - even if it beats expectations. He has two reasons: If the figure beats expectations of 7.6%, the comments from markets are likely to suggest the PBoC has further room to clamp down on speculative lending, and can further rein in shadow banking to continue slowing China's economy to a more sustainable level. This means growth and the demand for imports will slow and this will affect resource nations. If the GDP figure comes in-line or below expectations, it could lead to the market describing the number as a sign China is slowing at a greater rate than expected; this could show that China isn't in as healthier shape as expected and growth will further deteriorate. However, it is unlikely the PBoC or the central government are going to intervene with stimulus or a looser monetary policy as it is looking to slow China to a rate it believes it is sustainable. Both I believe are overhyped; the market is looking to poke holes in anything that shows signs of sustainability from China, Weston adds. However, I believe China is moving on a perfectly sustainable path; GDP moving to 7% to 7.5% over the coming years is perfectly acceptable, industrial production is holding and retail sales are increasing. China is moving towards a consumption nation and this can only be seen as a good thing from a resource-rich nation such as Australia, as the demand for commodities will remain. The "boom" (the rapid rise of China) is ending, but sustained demand is just as important to the Australian economy longer term. Today's release is important to gauge the trading sentiment of 2014, however it is also important from a longer-term sustainability perspective; an in-line result I believe is the best results as it shows the current macro levers from the PBoC and the central government are working and are moderating China as planned and expected 9:28am: The Aussie has had a poor weekend, trading lower still after Thursday's big jobs-inspired sell-off. It's broke below US88 cents last night and has been there since. It's now trading at US87.7 cents. Enjoy your cheap imports, online shopping and overseas travels while you can. 9:19am: Australian shares are expected to open flat or slightly lower after a mixed lead from Wall Street. AUD fetching 87.77 US cents, 64.81 euro cents, 91.36 yen, 53.46 pence Spot gold up 0.9% to $USUS1254.05 an ounce Brent oil up 0.7% to $USUS106.48 per barrel Iron ore down 0.8% at $US127.30 per tonne The TD inflation gauge for December is to be released. Good morning and welcome to the Markets Live blog for Monday.