4:43pm: And here are today's winners and losers among the top 200 names:

 

Best and worst performers in the ASX 200 today.

4:42pm: We focused a bit on the dollar's sharp dive against the greenback, but nearly more important is that the currency is also at four and a half year lows on a trade-weighted basis - the measure which most influences policy at the Reserve Bank of Australia.

Despite its recent falls against the greenback, the dollar had held up well when measured against a basket of currencies, frustrating the RBA’s desire for a lower dollar to help the rebalancing of the economy.

But a sharp depreciation of the Aussie against the Japanese yen and the euro over the past days has pulled the trade-weighted index down to its lowest since June 2010.

Over the past days, the Aussie has dived nearly 6% against the yen (white line) and 4% against the euro (orange), making the falls against the greenback (green...) look more benign.

4:30pm: Here’s what to look for when the Federal Open Market Committee releases its policy statement along with quarterly economic projections at [6am AEDT], and Federal Reserve Chair Janet Yellen holds a press conference shortly after.

Forward guidance: The Federal Reserve will drop its vow to keep interest rates low for a “considerable time,” even as Russia’s economic crisis roils markets, most economists said.

The FOMC will replace “considerable time” with a word such as “patient” to describe its approach to policy, according to 68 percent of 56 economists surveyed by Bloomberg last week.

Rate Path: Yellen, in her press conference, is likely to stress that that the Fed’s interest-rate path will depend on how economic data evolves, said Lou Crandall, chief economist at Wrightson ICAP.

The median forecast of FOMC participants in September for the federal funds rate at the end of 2015 was 1.375 percent. Of the 56 economists surveyed by Bloomberg, 49 percent said the median forecast won’t change, while 31 percent saw it moving lower, and 20 percent expected it to rise.

Oil, Inflation: Policy makers will look past the disinflationary impact of declining oil prices and instead emphasize the benefits to consumers, whose buying power is getting a boost from cheaper gasoline, said Paul Ashworth, chief U.S. economist at Capital Economics.

“I would be amazed” if policy makers don’t put a positive spin on the drop in oil, Ashworth said. “Gasoline prices have tumbled, and we are already seeing that in stronger U.S. data.”

Core Prices: The Fed’s preferred gauge of inflation rose 1.4 per cent in October from a year earlier, down from 1.5 per cent in August. It hasn’t been above the Fed’s 2 percent target since March 2012. The core price index of personal consumption expenditures rose 1.6 percent in October from a year earlier, up from 1.5 percent in August.

Balancing mandates: The most interesting question Yellen could face in her press conference is whether the Fed will raise rates before inflation increases and wage gains accelerate, said Guy Berger, an economist at RBS Securities.

“The inflation and wage stories are sort of the last pieces of the puzzle they are really waiting for to fall into place, given the labour market looks good and the economy is growing at a pretty decent pace,” he said.

 “Any sort of sense of confidence, or lack of confidence” in the inflation outlook “is what we will be paying attention to” because it could have implications for the timing of liftoff, Berger added.

4:24pm: Shares have managed to end a six-day losing streak to post modest gains off the back of a rally in energy and mining stocks, despite further drops in the prices of oil and iron ore.

The ASX 200 and All Ords are 10 points higher, or 0.2 per cent, at 5161.9 and 5140.6, respectively.

Bargain hunters jumped into the heavily sold-down oil and gas sector, with Woodside adding 3 per cent, Santos 4.3 per cent, and Origin Energy 2.5 per cent. Oil Search closed 3.4 per cent higher.

Rio added 1.4 per cent and BHP 0.3 per cent.

Telstra continued to trade solidly through the volatility, up another 0.7 per cent, briefly touching $5.80 during the day.

Banks were a drag, while QBE continued to drop.

3:54pm: Short and sweet was the name of the game for Credit Suisse Research today, as it released its global economic outlook for 2015 in a flurry of tweets.

Perhaps the most interesting of the 140 character posts was their forecast for Australia, despite only receiving one retweet by midday.

In the “sans tweet” edition of the outlook Credit Suisse analysts suggest slower growth and lower rates will be the main drivers in the rally to on the ASX 200.

The prospect of lower rates for Australia keeps the bank bullish “for now”, with global bond yields remaining low and and building the case for an RBA rate cut, the outlook report said.

Financing could likely become cheaper with Australian companies already enjoying the lowest cost of debt in a generation.

“With further rate cuts it’s going to get even cheaper,” said Credit Suisse research analyst Hasan Tevfik.

“This has profound implications. It means that a lot of investors and companies can use the debt market to buy equities. You can see demand for equities, either by companies buying back their own shares ... or through Australian companies becoming more attractive to international acquirers.”

Another tweet shows which sharemarkets are under- and which outperforming since oil started falling.

3:48pm: The bond bull-run looks set to continue: Aussie 10-year government bond yields are heading to 2 per cent, reckons ANZ rates strategist Martin Whetton. They yield 2.8 per cent now, close to historical lows.

This was supposed to be the year of the “great rotation” out of desperately expensive government bonds and into… well, anywhere else as the US Federal Reserve quit QE and global interest rates picked themselves up off the floor.

So much for that.

Local bonds have paid off big time this year. The Russell Australian Government Bond ETF has generated a total return of 12.5 per cent in 2014, against less than 1 per cent from the ASX 200 (that number includes dividends).

Explaining his bullish note, Whetton provides a laundry list of reasons for bonds to continue to rally: Global risk-off events, positioning, the grab for yield, falling commodity prices, liquidity, Japanese and potential ECB QE are tailwinds for the market.

“We believe the risk for markets is a melt-up — driving yields in core markets lower,” he writes in a report today.

Whetton doesn’t believe the RBA will cut rates.

Defying expectations, bond investors have made a lot of money this year, and yields could be heading even lower.

3:32pm: Many Australian currency traders have all but stopped trading in the Russian rouble as demand for the struggling currency dries up in the face of worries that its likely to depreciate further and market liquidity won’t be there to match orders.

OzForex treasury manager William Shepard said there is not usually a lot of trading in roubles in Australia because Russia is not one of our big export partners and due to complications with the way trades can be settled.

“We are still trading spot trades. We only allow clients to buy rouble from us, rather than sell. The majority of risk lies in taking orders, because the risk is the client wants a certain rate and they can’t match it.

“We don’t have an underlying rouble position so we are not exposed,” he said, adding that OzForex has not done a rouble spot trade for over a week on December 11 this year.

The rouble fell by up to 14.4 per cent overnight despite Moscow’s efforts to push it higher by raising of official interest rates to 17 per cent, from 10.5 per cent overnight.

The currency recovered a bit to be down just 4 per cent for the day, but it's continued its slide today, falling another 2.2 per cent against the US dollar. The US dollar-rouble is the 10th most heavily traded currency pair globally, according to Bank of International Settlements data.

Westpac and CBA are not big traders of the rouble because there is simply not the customer demand in Australia. But it is a different story among European forex trading platforms, many of which including FXCM have suspended trading of rouble amid growing signs of stress among the banks that underpin trade in the battered Russian currency.

Most Western banks have stopped pricing the US dollar rouble cross. Indeed major corporations like technology and software behemoth Apple is now refusing to accept online payment for sales in roubles.

 

3:07pm: After making a few calls around, we've come up with a few factors for the recent half a US cent plunge in the Aussie:

- positioning ahead of US Fed meeting statement tomorrow morning which is broadly expected to be more hawkish & negative for the local currency;

- people ready to sell within a broad negative view of commodity and energy currencies;

- any initial fall may have been exacerbated as the currency hit traders' technical stop-loss triggers; and

- thin trading leading into Christmas also amplifies price moves.

3:06pm: Brent crude oil has dropped below $US60 a barrel, hovering near its lowest in five years as a supply glut dragged down prices.

Oil prices skidded in recent weeks, with Brent down nearly $US20 since the Organisation of the Petroleum Exporting Countries decided to keep output steady in late November.

Non-OPEC member Russia, one of the world's top producers, has also indicated that it does not plan to cut output despite a glut in the market.

Brent for February delivery is down 0.8 per cent at $US59.38 a barrel. It touched a session low of $US58.50 overnight, the lowest since May 2009, and has plunged 50 per cent since June, when it was traded above $US115.

US crude dropped 97 cents to $US54.96 a barrel after touching the lowest since May 2009 at $US53.60 on Tuesday.

"The story is still the same. Europe is weak, China is weak, and the US economy is growing by a bit. It's a supply story," said Avtar Sandu, senior manager for commodities at Phillip Futures in Singapore.

"The only thing is that the markets are very oversold and oil is extremely cheap at these levels," he added.

Core Gulf OPEC members that had declined to cut production at a November 27 meeting signalled this week they are prepared to wait as long as six months to a year to see the market stabilise.

Kuwait's oil minister said on Tuesday that there were 1.8 million barrels a day of excess oil in the market currently and prices could pick up in the second half of 2015.

Russia Energy Minister Alexander Novak said yesterday that Moscow would not cut output in 2015, even if pressure on its finances rose with the economy showing signs of a severe stress.

The rouble has been hit hard, prompting Russia's central bank to rush in to hike interest rates to halt a collapse in the currency.

No bottom in sight for the oil price, as Brent continues its plunge today. Photo: Getty Images

Source: Australian Petroleum Statistics, BREE

2:52pm: Of all the unpopular measures in Joe Hockey's unpopular budget, reportedly the most unpopular was reinstating indexation of fuel excise.

Yet a much better - but even more unpopular - idea would be to seize the opportunity of crashing oil prices now to recoup all the indexation that has been forgone, Michael Pascoe writes:

Yep, I'm saying increase the price of petrol by about 12 cents a litre.

When you're stuck this deep in the policy and opinion poll mud and show no sign of climbing out, you may as well lather on some of the medicinal variety for its complexion-enhancing properties.

Hey presto, around $5 billion a year would disappear from Joe's troublesome deficit.

And he could claim all of that as a "direct action", carbon-reducing measure, allowing him to scrap the silly $2.5 billion allocated for burying charcoal and such.

But before the V8 drivers arrive at my garage door with tar and feathers, let me point out that there would be reasonable benefits for our economic health in such a move.

With oil prices nearly halving in six months, there are no higher petrol prices needing alleviation. Indeed, the punters would barely miss what they haven't quite got yet.

Read more

2:45pm:Embattled Boart Longyear says a recovery in demand for its drilling services could be more than a year away, as it secured the final piece of a $US342 million bailout plan.

Investors overwhelmingly supported the final $US84 million equity piece of Boart Longyear’s massive private equity recapitalisation package at a special meeting.

The company may experience a further fall in the use of its drilling rigs as gold and copper exploration continues to dry up, chief executive Richard O’Brien said.

‘‘There’s a possibility that we could, if we see gold prices fall significantly,’’ O’Brien said.

Boart Longyear has 60 per cent of its business in gold and copper exploration. A global recovery could come as late as 2016, with copper, nickel and other infrastructure-related metals suffering amid reduced demand in China, he said.

And he predicted a ‘‘gentle upslope’’ in recovery, rather than a v-shaped recovery.

The company plans to make its first debt repayment of $US300 million in 2018, followed by a $US120 million payment in 2020 and a $US285 million payment in 2021.

The company’s shares are down 5.5 per cent cent at 17 cents, down from more than 30 cents a year ago and $1.45 in December 2012.

That sinking feeling ... Boart Longyear shares have dived again.

2:26pm:Vocus Communications has struck a recommended deal to acquire Amcom Telecommunications at about $2.42 a share. This represents a 30 per cent premium to Amcom’s volume weighted average price prior to the announcement of merger talks between the two companies.

Both companies went into a trading halt at lunchtime, ahead of the deal’s announcement.

In October, Vocus raised its stake in Perth-based telco Amcom from 5 per cent to 10 per cent for an estimated $50 million and offered to merge the two companies.

Under Vocus’s proposal, Amcom shareholders would hand over their holdings in exchange for Vocus shares. Both sides agreed the move could work as they own fibre cable networks on different sides of the country that can be combined to ­provide a better national service.

However, Vocus switched gears the following month, suggesting a friendly acquisition that could create one of Australia’s biggest providers of phone, internet and technology services, with a market capitalisation of more than $1 billion.

At 1.30pm on Wednesday, Vocus had a market cap of $598.5 million while Amcom was valued at $628.7 million.

2:09pm: The Aussie dollar has dropped sharply, by around half a US cent, as low as 81.66 US cents.

No obvious reason for the rapid move, although Bloomberg is blaming "selling led by Asia-based macro investors" who have triggered "AUD/USD sell stops through 0.8190," quoting "FX traders based in Asia".

The Aussie has dropped sharply below 82 US cents.

1:58pm: Haven't the poor Russian citizenry suffered enough?

Apple has halted online sales of its iPhones, iPads and other products in Russia amid financial turmoil triggered by the steep decline in the country's currency.

The rouble plunged by as much as 20 per cent on Tuesday, even after Russia's central bank increased interest rates sharply to try to shore up the currency.

The rouble's value has fallen by more than 60 per cent since January.

Its decline has coincided with a dramatic decrease in the price of oil, a pillar of Russia's economy.

California-based Apple said on Tuesday US time that the rouble's instability had made it too difficult to set its prices in Russia, prompting the closure of its online store there.

1:34pm: A shipment of BHP Billiton iron ore was quietly sent to India this month, with imports of the steel-making ingredient made viable for the giant Asian nation by a dramatic crash in the spot price to five-year lows of below $US70 in a tonne.

It is the not the first ad-hoc shipment BHP has made to India. Buyers have taken advantage of price falls in the past to make orders falls make Pilbara iron ore competitive with the country’s vast domestic reserves.

Depending on whether the iron ore price continues to languish near current lows, BHP is likely to send about 2 million tonnes of iron ore to India this financial year.

It will account for a tiny portion of BHP’s forecast 245 million tonnes of Pilbara production.

India has swung from a huge exporter of iron ore to a net importer in just four years, largely because of a Supreme Court ban on mining across three states. In 2011, India was one of the world’s biggest exporters of iron ore, shipping about 100 million tonnes. This financial year it is tipped to import about 12 million tonnes of the commodity.

India’s domestic iron ore sector has been languishing since the Supreme Court ban, issued amid mounting fears about the environmental damage being wrought by “illegal” mining. And India’s steel mills are short on iron ore.

The Supreme Court has since lifted its ban in two states in the past year, but has attached a series of conditions. Some State governments have also been dragging their heels on renewing mining leases.

India’s latest BHP order could also be in part driven by a government crackdown on iron ore mines that are deemed to be poorly run.

Iron ore has crashed almost 50 per cent this year to hover at around $US70 ($57.50) a tonne.

The iron ore price fall saw Pilbara junior Atlas Iron start shipping to India in the current half, to broaden its customer base away from China.

Read more at The AFR ($).

If iron ore prices were to languish below $US70 a tonne, BHP Billiton may ship as much as 2 million tonnes of iron ore to India by June 2015. Photo: Christian Sprague

1:03pm:Two dud floats in a day - this time Latam Autos, another online play. Shares issued at 30 cents started trading a few moments ago and are now trading at 24.5 cents, down a heavy 23 per cent, but just off the low of 24 cents.

It followed the poor start to trading of outdoor billboard operator oOh!media which is off 8 cents from its IPO price, at $1.85.

12:51pm: It shrugged off the dumping of energy stocks of the past few weeks, largely since it is seen primarily as an oil retailer with the closure of its Sydney refinery, and now Caltex is how benefiting from the broad rebound of energy stocks so far today - touching new all-time highs at $33.31, up 3.1 per cent.

Average fuel prices are at their lowest this year, following wholesale prices down. Interestingly, the usual weekly gyrations due to the discounting cycle have gone missing this month. Source: AIP

12:32pm: Ratings agency Standard & Poor’s has cut its price assumptions for crude oil for the second time this month, raising the prospect that companies will face further pressure on their credit ratings as their creditworthiness is tested against the lower prices.

Just three weeks after the last cuts in price assumptions for crude oil fed through to a cut in the rating of Santos, the estimates have been further reduced by about $US10 a barrel, with S&P citing the “precipitous declines” in future prices.

S&P said it will now assume a price of $US70 a barrel for Brent crude oil in 2015, instead of $US80, and $US75 a barrel in 2016, instead of $US85. For the US benchmark West Texas Intermediate, the assumed price is now $US65 a barrel for 2015 and $US70 for 2016.

Those new levels are still well above current levels for crude futures, with Brent at about $US60 a barrel, while WTI is about $US55.40.

“Over the coming weeks, we will be updating our forecasts, and we anticipate a number of corporate rating actions in the upstream and oil field service sectors,” S&P said.

“However, any such actions also depend on company-specific factors, including our other rating assumptions and issuers’ flexibility to adapt to lower prices, hedge positions, and liquidity. We anticipate few immediate sovereign rating changes as a direct consequence of these updated price assumptions."

The oil price is falling so fast S&P can hardly keep up with cutting its forecasts. Photo: Jessica Shapiro

12:24pm: The Organisation for Economic Co-operation and Development has taken aim at a raft of Australian budget measures, describing one as potentially unsustainable and another as requiring close monitoring.

It has also urged Australia to shake up superannuation tax concessions and to lift sharply the goods and services tax to cut income tax.

The Paris-based organisation's biennial review of Australia found the balance of risks facing the Australian economy contained more substantial downside than upside.

"External risks, chiefly from commodity markets, combined with speculative activity in the housing sector and uncertainties in the responsiveness of non-resource sectors, could conspire to generate a period of weak macroeconomic activity," it said.

The report's lead author, OECD economist Philip Hemmings, told Fairfax Media the Newstart change could have a significant impact on low-income households and had to be watched closely.

The government's proposed cut to pension indexation was likely to be unsustainable over the long term, he said. Australia's aged pension replaced only 60 per cent of half Australia's average wage, which was low by OECD standards.

The government's plan to remove the link between the age pension and wages would cause its value to drift down in relation to average incomes, Hemmings said. At some point it could "cross socially acceptable limits of adequacy".

Australia's tax treatment of superannuation was unusual, the report said.

Read more

12:09pm:Another poor IPO debut - this time the much hyped oOh!media billboard operator.

Its shares which were issued at $1.93 and started trading a few minutes ago at $1.85, down 4 per cent from the issue price.

Private equity owner CHAMP remains the largest shareholder in the company with an 11.2 per cent stake after the float, which represented 58.3 per cent of total shares on issue.

CHAMP and other related major pre-existing shareholders Perpetual Trustees and Cavendish Square Holdings are have entered voluntary escrow arrangements on their remaining shares.

12:08pm:Woodside Petroleum’s move into the unconventional shale petroleum business, confirmed by yesterday’s $US3.75 billion deal with Apache, has been met with caution in the market, mostly due to the uncertainty over the economics of LNG exports from western Canada.

The deal with Apache will see Woodside, which has until now avoided the unconventional petroleum space, take over Apache’s 50 per cent stake in large shale gas resources in the Horn River and Liard Basin plays in British Columbia.

As Apache is currently operator of that venture, alongside Chevron, Woodside will also initially take on that role, although chief executive Peter Coleman said that it would look to pass that responsibility to experienced shale player Chevron.

JPMorgan analyst Benjamin Wilson said the move into shale gas was unavoidable for Woodside given its size and the difficulty of buying high quality unconventional oil and gas assets.

“We consider the acquisitions to be broadly consistent with Woodside’s strategy of growth through LNG, however the new upstream exposure to the Horn Rover and Liard Basin unconventional plays is a step out for the company,” Wilson said in a note to clients.

“We believe the step into the unconventional world is a move that an independent E&P [exploration and production company] of Woodside’s size could not avoid forever given the difficulty in buying large-scale, quality conventional resources at an acceptable price.”

Shares are up 4 per cent at $35.82, rebounding strongly from their recent selloff.

Woodside is the brightest light among the blue chips today. Photo: Aaron Bunch

11:43am:The Russian rouble crisis will deal a blow to investor sentiment, putting traders on edge and hurting appetite for shares and risk currencies such as the Australian dollar.

The Russian currency fell by as much as 23 per cent over the past 48 hours, defying an emergency rate hike from Russia’s central bank which raised interest rates to 17 per cent from 10.5 per cent. That failed to stabilise the rouble and the rout continued in trading overnight.

The currency is down another 1 per cent this morning, taking the total fall over the past two days to 16 per cent.

The economic crisis in Russia follows a collapse in energy prices which has hurt one of the world’s biggest energy exporters.

Raiko Shareef, a currency strategist at National Australia Bank-owned BNZ in Wellington said that the consequences of the rouble’s plunge would probably extend into next year.

“The first order and probably the short term impact is on risk sentiment and investor sentiment, that will feed through as a mild negative on the Aussie dollar, risk sentiment being negative for equities and risk currencies such as Aussie and Kiwi.”

Shareef said Russia’s response would be a subject of interest and investors will be occupied with “more geopolitical concerns about what Russia’s political leaders do now that their backs are against the wall”. “Clearly some pretty desperate measures are needed to stem the rouble’s slide.  Those are probably going to play out in 2015 rather than the near term,” he added.

The situation might influence volatility too, but the currency strategist observed that the energy price shock was a more dominant force in shaping volatility levels.

“Whippy price action is already happening and maybe some of it is due to the situation in Russia and just investor concern at the moment. More broadly it’s probably due to the plunge in the oil price, people are unsure as to where that bottoms out.”

11:32am: Australia's major banks, miners and healthcare companies are at risk of being caught up in corruption because they operate in high-risk countries and do not have proper safeguards in place, a report from Citibank warns. 

Cochlear, Westpac and Newcrest Mining are among the top ASX-listed companies named in the report as having a "high risk" exposure to bribery. This is based on the countries in which they operate, their sector and their involvement in government contracts. 

Small miners operating in developing countries and "banks expanding into Asia" are also high risk areas, the report said. 

Citibank said regulatory focus on bribery and corruption was increasing, leading some companies to respond with tighter safeguards. However, many companies were falling behind. 

"Companies implicated in bribery or corruption may face loss of contracts, or loss of opportunity to tender for contracts," it said. 

"We still identify some laggards among resources companies, companies providing services to the international resources industry, and in healthcare."

It said the health and medical sector, because of its close work with governments, was particularly at risk, singling out Cochlear as having poor internal mechanisms to deal with the risk. 

"Health and medical is an industry sector identified as being exposed to potential bribery risk. Cochlear currently provides little information on how it is addressing this risk." 

A Cochlear spokesman declined to comment. 

Read more.

Cochlear is one of the "high risk" comapnies named in the report.

11:14am: A 15 per cent jump in the share price of battling education firm Vocation has startled the horses and brought forth all sorts of theories.

One of the most common is that 15 per cent shareholder Brett Whitford may be lining up support to help him take control of the company which ousted him in June, and start repairing the tortured brand.

Also raising eyebrows was a substantial shareholder notice from Mayfair Management which now holds 6.7 per cent after buying up stock in the few days up until December 12.

Melbourne accounting firm Peter Sutton & Co lodged the notice on behalf of Greg Farmer’s Mayfair Management.

There has been some suggestion there may be a connection with an entity called Pragmatic Training, which also operates in the training and education industry.

Elsewhere, for those who used to get angry about Cosmo Spacely’s harsh treatment of his employee George Jetson in The Jetsons cartoon series, more patience is needed when it comes to the company behind the futuristic Martin Jetpack.

The Martin Aircraft Company, which was due to list on the ASX in early December, has extended its offer until Friday, ostensibly to reel in a new investor who emerged in recent weeks.

However, news that the broker Martin Aircraft had engaged is no longer involved has raised questions about the float. Street Talk understands that it is a US-based investor waiting in the wings, yet the initial public offering isn’t open to US investors under its current structure.

The chief executive, former Lockheed Martin executive Peter Coker, has signaled that the Martin Aircraft board will meet to chat through the implications of the “strategic investor” by the end of the week.

11:00am:AGL Energy has stated it has fully protected its oil-linked gas sales contracts from the plunge in oil prices through hedging contracts after the sharp dive in global crude prices over the past months.

The utility has two gas sales contracts with customers in Queensland for the 2015-2017 financial years where sales prices are directly linked to crude oil.

“Soon after entering into these contracts, AGL fully hedged its exposure to the oil price for the life of the contracts,” it said in a statement on Monday.

Australian domestic gas sales contracts started to be increasingly linked to crude oil several years ago as the market restructured with the preparations for the start-up of LNG exports from Queensland, now due to get under way this month.

Whereas the oil price linkage was originally seen as an advantage because it appeared to ensure prices for gas sales above those typically available in the domestic market, the more than 50 per cent plunge in global crude oil prices since June while east coast gas contract prices are on the rise has turned the tables on the arrangement.

AGL said that its hedging contracts meant the margins on its contracted Queensland gas sales in the 2015, 2016 and 2017 financial years were “locked in, and not affected by the recent fall in oil prices.” It noted that the average margin on the 57 petajoules of gas sales it expects in 2014-15 is $3.40 per gigajoule.

The electricity and gas supplies has been increasing sales of gas to wholesale customers in Queensland, with volumes this year increasing from 19 petajoules in 2013-14. It is also in negotiations for additional sales for the next two years.

The utility also said it had sealed a contract to buy 69 petajoules of gas from the Otway Basin from 2018 to 2021, as it foreshadowed at its annual results in August.

11:00am: One way to look at the slide in the oil price ...

 

Of course as the following image shows - taken from the Coles online shop - oil would have to more than double in price, taking it back to 2012 levels to come anywhere near the price of expensive Aussie water.

The price of oil has slumped to 46 Australian cents (that's based on a price of $US60 per barrel, or 159 litres), well below what local retailers are demanding for water.

10:47am: Shares in IT services firm DWS have been whacked by as much as 13 per cent this morning after the company announced that its "first-half EBITDA will include a one-off, extraordinary write-down in connection with its investment in the joint venture entity with Borealis, a Canadian-based software company".

Why? Blame Ebola.

In a statement to the ASX, DWS said Borealis has been unable to pay amounts owed to the JV entity due to the "financial impact of the Ebola virus on its software projects at mine sites in West Africa".

"Borealis is subject to official insolvency protection in Canada," the company said. "The JV entity will apply to wind-up the Australian subsidiary of Borealis and will work with the liquidator in an attempt to recover monies owed."

While the size of the write-off wasn't specified, DWs said it now expects EBITDA over the first half to be in the range of $7m to $7.5m, against the previous corresponding period's $9.47m. At its AGM the company had provided guidance of $7.75m to $8.5m.

The shares have settled 7.2 per cent lower at 97c.

10:33am:Shares in Leighton Holdings have been halted for up to two trading days "due to media speculation regarding a transaction involving Leighton’s operations and maintenance services business as part of the strategic review announced in June 2014," the company said in an ASX announcement this morning.

It comes following a report in the AFR's Street Talk column that private equity giant Apollo Global Management is finalising funding for its $1 billion Leighton Services acquisition in an effort to have a deal done by the end of the week.

Sources said Barclays Capital was arranging Apollo’s finance and is also sole M&A adviser. Other banks are expected to come into the debt syndicate.

As foreshadowed by Street Talk on Monday, Apollo is in exclusive talks with Leighton Holdings about its Services’ operations which include non-core businesses such as facilities management, waste disposal, telecommunications maintenance and land remediation.

The deal is expected to be worth between $900 million and $1 billion which is likely to surprise analysts and Leighton shareholders.

Up for grabs is a bucket of assets which make $2 billion in annual revenue. Assuming 5 per cent margins and $100 million in earnings before interest and tax, a $1 billion price tag would represent a fairly standard 10-times EBIT.

Apollo, led by the highly-regarded Steve Martinez in Asia Pacific, was the underbidder to London-based rival BC Partners for retailer PetSmart in an $US8.7 billion deal announced on Monday. That transaction marked the biggest US private-equity deal for 2014.

Apollo’s major investment in Australia is in television, ticketing and digital company Nine Entertainment Co, worth close to $400 million.

10:21am: Shares have shrugged off turmoil in Russia, a soft lead from Wall St and a further slide in the price of Brent crude oil to post early gains.

After slipping slightly at the open, the ASX 200 is 16 points higher at 5168.5, up 0.3 per cent, while the All Ords has gained 15 points to 5145.6.

Energy stocks are enjoying a rally, with the sector the best performing, up 1.7 per cent. Miners have also climbed.

Recall Holdings is 3.6 per cent lower, slipping below the $7/share bid from peer Iron Mountain at $6.75.

The banks are slightly higher.

9:59am:Cooper Energy chief executive David Maxwell says a $52.5-million deal struck with Santos has put in place another cornerstone that will enable the junior oil and gas player to take advantage of the tightening east coast gas market.

The deal, announced on Tuesday, will have Cooper take a half-share in the undeveloped Sole gas field about 65 kilometres off the coast of Victoria and in Santos's Patricia Baleen onshore gas processing plant near Orbost.

Mr Maxwell said the acquisition opens up opportunities also for Cooper's Basker Manta Gummy gas and liquids venture, either by processing gas from the fields at the Orbost plant or to achieve cost savings through co-operating on drilling rigs and services.

"The interest from our point of view is we see Gippsland as low cost, easy to monetise, conventional and available for sale into eastern Australia," he told Fairfax Media.

The deal involves a $2.5-million payment by Cooper to Santos for the share in the assets, while Cooper will also fund the first $50 million of design and development costs for the Sole project, Mr Maxwell said. That means an effective purchase price for Cooper of $27.5 million, assuming the project is developed, he added.

Capital investment required to develop the Sole project has been put at about $600 million, including engineering and design work, but that budget is 6-9 months old and will be updated, with the hope of reducing costs in the current low-oil price environment, Mr Maxwell said.

The deal also reduces Santos's exposure to required capital investment at the project, although the origins of the deal pre-date Santos's recent advice it would consider asset sales in light of its stretched funding position after the slump in oil prices.

Read more.

9:50am: So where's all the money going that's flowing out of Russia and other emerging markets?

A big chunk of it is going into the usual 'safe havens' - bonds, and especially US Treasuries, and the yen.

US 30-year bond yields dropped to the lowest level in two years, German bunds, Australian government bonds, US gilts, and Japan’s securities all rose too, weighing further on their yields (which move in opposite direction to prices), which are already rock-bottom as inflation expectations continue to sink.

The yield on the 10-year Australian goverment bond has slid to 2.81 per cent, its lowest in more than two years.

‘‘It’s causing a flight to quality into Treasuries,’’ said Jason Rogan, managing director of US government trading at Guggenheim Securities. ‘‘Although attention has moved to the Fed (as the US central bank meets), most eyes are trading off what oil is doing. Russia is leading the charge in the fear.’’

The US 10-year note yield almost touched 2 per cent, the lowest since October 16. It is still the highest-yielding among the Group of Seven countries, as the US notes yielded 83 basis points more than the average of their G7 peers.

Australian (yellow line) and US (white) 10-year bond yields have dropped to two-year lows.

9:40am:Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia.

He was soon working around the clock when investors began targeting the region’s currency pegs, first felling Thailand’s in July. The rout spread through Asia before rocking Brazil and Russia. It led to the collapse of Long-Term Capital Management, an event that introduced the Federal Reserve-brokered bailout.

If the 48-year-old native of Taiwan, with a PhD from Massachusetts Institute of Technology, sounds a little jaded now, it’s not without some reason. He says he worries that many emerging-market analysts are too young to remember the late 1990s. Instead they learned the ropes in an era dominated by the rise of Brazil, Russia, India and China -- a supposed one-way bet to prosperity.

“Many became EM specialists after the term ‘BRIC’ was coined in 2001 and don’t know any serious crisis,’’ says Jen, who now runs the London-based hedge fund SLJ Macro Partners.

The youngsters are about to be schooled. Jen says echoes of 1997-1998 may be at hand.

Investors woke up today to Russia’s 1 a.m. interest-rate increase to defend the ruble. There’s the mounting likelihood of a Venezuelan default. Stocks from Thailand to Brazil are reeling. The Fed hasn’t even begun raising interest rates.

Jen is bracing for more pain.

“At some point, the risk of fractures in parts of EM will rise sharply,” said Jen.

While unwilling to draw up a blacklist for now, he says exchange rates reveal emerging-market dangers. Russia’s ruble, Brazil’s real, Mexico’s peso, Turkey’s lira, the South African rand and Indonesian rupiah have all hit the skids.

The biggest causes for worry, bigger than a recession in Russia or the oil-price plunge: the slowdown in China, which has already upended commodity prices, and the likelihood US growth will propel the dollar higher and suck assets out of emerging markets.

“My long-standing view on EM currencies is that they could melt down because there has simply been way too much cumulative capital flows,” said Jen. “Nothing the EM economics can do will stop these potential outflows as long as the US economy recovers.”

SLJ Macro Partners Co-Founder Stephen Jen said, “My long-standing view on EM currencies is that they could melt down because there has simply been way too much cumulative capital flows.” Photographer: Jin Lee/Bloomberg

9:31am: Retail heavyweight Woolworths has made its first land grab, as it rolls out its new convenience store strategy in Melbourne.

The retail giant has signed up for two CBD locations on Swanston and Flinders streets for the scaled-down stores, prompted by a wave of new apartment and office-block-conversion dwellers living in the central city.

Woolworths will roll out a new convenience concept store at 160 Swanston on a gross rent believed to be around $2030 a square metre in a deal negotiated by Allard Shelton's Patrick Barnes and CBRE.

Another deal is understood to have been negotiated by Colliers International for 700 square metres at 262 Flinders Street in a space occupied previously by an IGA store.

The fully fitted shop has links to Melbourne's famed Degraves Street.

Woolworths was coy when asked about its strategy to take over smaller city retail spaces.

"Our stores vary in size and are designed to best meet the needs of the community they serve," was all a Woolworths spokeswoman would say.

Last week it opened a small concept store at 302 Elizabeth Street in Sydney.

It was model