Sharp yuan devaluation will hit commodity prices

The Australian Financial Review reports that a depreciation of 1% in the Chinese yuan leads to a decline of 0.6% in commodity prices, according to Bank of America.

This relationship with the currency is the strongest for commodities such as copper and platinum, of which China is the world's dominant consumer, the US bank's strategists wrote in a report dated January 25.

A cheaper yuan will erode the purchasing power of the Chinese, pushing prices down and outweighing any benefit from easier financial conditions that a devaluation may bring, they said.

BHP Billiton's credit rating cut one notch by S&

BHP Billiton, the world's biggest mining company, had its credit rating cut at Standard & Poor's, according to the Sydney Morning Herald.

The rating was lowered to A from A+ to reflect changes in commodity forecasts and “very challenging market conditions and increased demand uncertainty over the coming years”, S&P said in a statement on Monday.

Ratings for the Melbourne-based miner may be lowered one notch further after it releases earnings on February 23, S&P said.

Russian oligarch in ATO sights

Russian oligarch Vladimir Iorich's investment house Pala Investments has had $116 million worth of Australian shares frozen at the request of the Australian Taxation Office's Project Wickenby team, according to the Sydney Morning Herald.

Pala's $107 million worth of shares in mid-tier gold miner Alacer Gold were frozen by the Federal Court, as was the group's 6% holding in Perth-based uranium explorer Peninsula Energy, valued at more than $9 million.