Baltic Dry Index

The Baltic Dry Index reflects bulk international commodity shipping rates and provides advance warning of changes to commodities prices and particularly at the moment, activity in China. The BDI has been in decline since early June. This was a precursor to the fall in both the Shanghai and CRB Commodities Indexes that we have seen recently. Weakness in these two indices are a little worrisome for Australia. Perceived weakness in China has also caused the price of oil to fall below $US70 a barrel. Also note that China's key stock index dived 6.74% on Monday and 21.8% in August.

GDP Wednesday
Last week economists were forecasting 0.6% growth in real GDP for the qtr. Inventory figures released yesterday showing a record drop of 3.4% in the qtr may cause some economists to review down their forecast. A positive slant could be that demand picked up during the period causing inventories to be run down to keep up with demand rather than run down due to a perceived future weak demand.

Company profits fell a seasonally adjusted 7.8% it was also announced.