Here's my summary of the key news overnight in 90 seconds at 9 am, including news of a Fed announcement that has surprised markets.
There was no tapering announced by the US central bank. Rather it has stayed focused on reaching its jobs target and getting unemployment down to 6.5% in America.
The immediate reaction by markets was sharp cheering. The Dow hit an all-time record high, gold jumped US$40+/oz, and oil rose US$3/barrel.
The jump in asset prices in US dollars however won't be reflected here, because the NZ currency was also one of those that rose on the announcement, surging up over 83 USc. The rise by the Kiwi was broad based, gaining against all its main benchmarks, including the Aussie. The TWI is now sitting at 77.4.
US interest rates have only moved marginally higher, the UST 10yr up to 2.87% in mid-day trade after the Fed announcement. Most US observers now expect the Fed to raise its benchmark 0.25% rate in 2015. First bond tapering must get started and the free money end, then rate rises. Also, there is a little matter of negotiating through the US debt limit politics, and the Republican-controlled House is getting even more obstructionist.
Data for American housing starts and building permits issued came in higher in August but were below analysts expectations.
In other news, Fitch's respected analysts Charlene Chu is warning that China's credit boom is still growing 50% faster than its economy in August and because it has been doing that for 5 straight years, it can't be sustained at this pace.
General Motors has renewed its commitment to its electric car program, even though it has been a big disappointment on sales so far. In a similar move, later in the day China also committed to extend and expand its subsidies for electric cars, but is excluding hybrids from that program.
And speaking of cars (and subsidies), big decisions are about to be made in Australia about the future of their car industry. It seems unlikely the new government will continue to stump up the subsidies needed to keep companies like Holden manufacturing in Australia.
The NZ dollar starts today at 83.6 USc, 88.1 AUc, and the TWI is at 77.6. its highest level since mid May. The all-time record high was 86.3 USc with the TWI at 79.3 on April 12 earlier this year.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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18 Comments
Things are going really well in EU?
http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100025568/m…
Bernanke can't get off the bike, without it crashing.
Ever.
Economics, meet the real world.
A bit like Nick Smith, meet the real world. He opened the 'Valuing Nature' conference, with a piece of drivel about how he doesn't want to hear anything of the Limits to Growth. Then he goes out and champions a series of one-off, never repeatable, physical actions.
I suggest we have a Minister suffering from cognitive dissonance, I suggest he seeks treatment.
Worse really.
The very fact that he say's he doesn't want to hear anything of the "Limits to Growth" means he is aware of it and understands it. Which as a member of Govn and cabinet makes him cupulable/liable in my eyes for the willful ignoring of the excess damage and hardship that will result.
What more can be said when the ppl who are meant to look after our Nation actually seriously damage it. I cant see how they can defend themselves before a court, even if its only that of public opinion.
regards
Bernanke can't get off the bike - it's a fixed-wheel - no brakes - and it's all down hill
It's like one of those long-ago nightmare road trips where you are 100 kms since the last petrol station and you are sniffing empty - as you sweep around each bend in the road you desperately look for the next rural village hoping for a petrol station - the further you go the futility of turning back increases - finally you come to a village - but the only petrol station is closed
The irony Gonzo, of Aucklanders screaming for Team N.Z's returning the Cup and the rate rise that comes with it is not lost on me at all....
Old Brown nose is going to stick it to us again with more development to accommodate future spectators and ...things they might buy.
We have plenty of bloody hills, why can't they just go stand on them at no cost to the ratepayer....? you see it all..! 3D too...!
If it is truly N.Z.'s cup........levy them all ,top to bottom.
http://www.huffingtonpost.com/ellen-brown/the-armageddon-looting-ma_b_3944739.html
How to get free air travel, the pudding edition:
http://gizmodo.com/how-an-engineer-earned-1-25-million-air-miles-by-buying-1339646546
"Doing this counted as a considerable charitable donation"
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