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90 seconds at 9 am: Dow edges down ahead of Fed decision; Eurostoxx fall as unemployment rises to 11.2%; NZ$ solid ahead of Fonterra auction

Posted in News Updated
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Here's the key news overnight in 90 seconds at 9 am, including news the Dow fell 0.5% as investors settled in to wait for tomorrow morning's announcement from the US Federal Reserve about how and whether it will announce new measures to stimulate the world's largest economy.

Bloomberg reported most economists expect the US Federal Reserve will wait until its September 13 meeting before announcing a fresh round of money printing or quantitative easing to buy US$600 billion more of mortgage bonds and government bonds.

It could also extend its forecast of near-zero % interest rates beyond its current horizon of late 2014 or cut its interest rate for bank excess reserves at the Federal Reserve.

Many expect the Federal Reserve will wait for more information from the key non farm payrolls report for July due out on Friday night New Zealand time.

Further reinforcing the slowdown in the US economy, US consumer spending was stagnant in June as consumers worried about their jobs saved any extra income. See more here at Bloomberg.

Meanwhile, European stocks fell around 0.6% after Swiss bank UBS and global oil giant BP reported profits that missed expectations. Also, Euro-zone unemployment rose to 11.2% in June, with unemployment at 24.8% in Spain, unemployment in Portugal at 15.4%, Ireland at 14.8% and France at 10.1%. See more here at Bloomberg.

European markets are on tenterhooks for the European Central Bank's announcement due on Thursday night New Zealand time. Many hope for some news to calm Southern European bond markets and reduce the yields Italy and Spain are paying for their debt. Markets eased some of their enthusiasm after German officials poured cold water on the idea of using a rescue fund to buy Italian and Spanish bonds.

Meanwhile in Asia, South Korean factory output unexpectedly fell in the three months to June, reinforcing concerns that the Asian growth engine in China is sputtering. Korea supplies many of the components assembled in Chinese factories. See more here at Bloomberg.

China again reiterated that growth was its key priority in a statement via official news agency Xinhua last night, although it was vague about what action Chinese authorities would take.

Closer to home, traders are watching for the results of Fonterra's next fortnightly milk powder auction due tomorrow morning. A severe drought in the United States has yet to boost dairy prices. See more here in BNZ's currencies report on our site.

The New Zealand dollar was solid just under 81 USc in overnight trade.

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16 Comments

I think we should be focusing

I think we should be focusing on our Mr Freeley.
  From the article yesterday,
>>>>
"We had a case come in during the last couple of weeks - we can't at this stage give details other than to say there are a lot of things that concerns us. The scale, on what we saw is certainly the potential for tens of millions and doing crude calculations it could be up to $250 million," Feeley said.
The revelation is likely to spark furious speculation as to the target of the investigation.
Feeley said yesterday that he is quitting the SFO in three months to become the chief executive of the Queenstown Lakes District Council
http://www.stuff.co.nz/business/money/7383655/SFO-investigating-250m-fraud-case
Today they have changed the story
http://www.stuff.co.nz/business/industries/7387853/Serious-fraud-buster-Feeley-feted
 
So who had their hand in the till and was it stealing of the taxpayer? I suspect its about SCF as there were some strange going on before the government took over. Suddenly the story gets burried and we get some spin.  Who would be powerful enough to influence the head of the SFO? That would take some doing and the offer of a nice job down at the lakes, that to would take a bit of shifting at a high level to achieve.
 
 Last nights thread ended here , love to find out whats going on, who's pulling the strings here, and who's the guilty party?
 

by Andrewj | 31 Jul 12, 3:04pm

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Ok, who's lost the 250 Million
http://www.stuff.co.nz/business/money/7383655/SFO-investigating-250m-fra...

by Stephen Hulme | 31 Jul 12, 3:06pm

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Lost or embezzled? : certainly the plot thickens over Feeley's sudden departure to grasses greener.

by Kate | 31 Jul 12, 3:22pm

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Well it was interesting that the Council broke the news of his resignation rather than his existing employer.  And then this obviously deliberate 'leak' of info from him.  Makes me wonder whether he had concenrs the prosecution would not be taken in the event he remained - and so the only way to ensure its follow up was to resign so as to be free to make the 'leak'.
 
Certainly odd.  And of course the previous CEO of QLDC finished up her contract early (and very abruptly in terms of notice) and has now gone to head up that Tamaki residential redevelopment PPP initiative recently announced in Auckland.
 
Musical chairs.
 
 

by Stephen Hulme | 31 Jul 12, 3:41pm

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LOL- Musical chairs: more party apparatchiks prostrating themselves at the bidding of their political master's money men, I'd say.
 
But just as the veil of secrecy descended over the identity of SCF's bailout beneficiaries, I am sure a whisper proof shroud is being erected around those Mr Feeley thinks are indictable, despite his apparent inabilty to bring the investigation before the glare of public scrutiny.  

by iconoclast | 31 Jul 12, 3:19pm

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Using the Tar 'n' Feather principle that exonerates everyone with wealth of less than $200 mil available to be lost.

by Stephen Hulme | 31 Jul 12, 3:23pm

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LOL - I guess you haven't had your shoulder tapped?

by iconoclast | 31 Jul 12, 3:59pm

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Initial reaction was, if the issue came up some time long before last week, and Feeley was rocking a few boats, and some at the top-end-of-town were pressuring him to leave it alone, but being the honest-soul that he is, chose the honourable route, and left, but in doing so decided to lob a hand-grenade as he walked ... is that too convoluted? ...

by Stephen Hulme | 31 Jul 12, 4:10pm

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but being the honest-soul that he is, chose the honourable route, and left, but in doing so decided to lob a hand-grenade as he walked ... is that too convoluted? ...
 
 
Maybe you are right and he is not going to take the CEO position in Queenstown, which looks as though it was hastily vacated, to make room for him. See Kate's comment above.

 

Andrewj, 250 million,

Andrewj, 250 million, interesting scale, if existing entity would have to be long running which is harder to avoid detection otherwise.... if it is recent activity I would not discount an activity related to Christchurch as a possibility. Certain the scale, unstructured set up... coupled with fast growth of spending  and lack of refined processes. Good ingredients.

I am not so sure Andrewj.

I am not so sure Andrewj. They (Herald) did highlight another method of case solution during Mr Feeley's reign as SFO boss.
 
Other significant cases overseen by Mr Feeley during his three-year tenure include the SFO investigation into South Canterbury Finance owner Allan Hubbard which led to charges to the value of $1.7 billion.
The case never went ahead after Mr Hubbard died in a car accident.
 
I guess I watch too much television - but such conclusions remind me of Tony Soprano's method of seeking justice.

Should just say

Impeccably bad timing.

Impeccably bad timing.

Belle, the intrigue is

Belle, the intrigue is killing me. Are you referring to his manners or something else?

Lol, what was it 24 hrs ago

Lol, what was it 24 hrs ago Mr Feely resigned. Noting the 250 million case. I love conspiracies, I think they keep the world turning these days, and boy I bet this announcement set the cat among the pigeons. Now I am not saying there is a relationship. No way. Todays announcement tho, the  timing  is ..................astonishing..   
I do want to add, I have met Adam Feely, thought he was great dude, and I do admire what he has done over the last 3 years. I think the enforcement brigade have lost a real fighter.

Thanks for your illuminating

Thanks for your illuminating insights.

I get the feeling you are

I get the feeling you are being facetious.......not sure on spelling havent used that word for a while. For someone like me, your average jill, watching these twats rort the other average jill and joes out there, Adam has been our shining light doing his best to get some retribution. The fact that I, who lives in the wops and never gets to meet any bugger thats important, actually met this dude.....
Feely for president I say! 

Certainly not Belle, it's

Certainly not Belle, it's interesting to hear the thoughts of someone who has had personal contact and consolidates possble reasons for Feeley's unusual departure from a government department.

So no QE111 announcement by

So no QE111 announcement by Thursday then Bernard...?
It's just not happening is it Jim........?
This from July 17 was more than a hint at the futility of  untargeted fiscal stimulus..."the Markets " can scream all they want for injection but untill they become involved in solutions in terms of employment and productivity instead of looking to clip the ticket on every passing dollar......there should be no relief for them, given.  
 

Bernanke is due to deliver his semiannual monetary policy report to Senate and House committees Tuesday and Wednesday, though analysts said he is not likely to divulge plans of further economic stimulus.

 

Stocks lost ground this week as the Fed’s June meeting minutes showed policymakers are open to the idea of more economic stimulus, but that conditions might need to worsen first. Investors were hoping the minutes would suggest the central bank was getting closer to another round of stimulus.

 

“I don’t think he’s going to allude to any quantitative easing, so I don’t think you’ll get any solace from that,” Van Batenburg said.

 

Bernanke is more apt to urge Congress to act on fiscal policy and tackle the issues of huge budget deficits and the impact on the economy of approaching sharp cuts in government spending known as “the “fiscal cliff.”

 

“I would expect him to try to bring the message home to policymakers to address the fiscal cliff. Fiscal tightening flies in the face of any effort to dodge deflation.”

 

 As a footnote the is a bill pending on FTT's in both the U.S. and Europe......targeting volume traders.....one to put on the watch list.

Rabobank's 1.1% bonus to

Rabobank's 1.1% bonus to existing customers who signed up before March 12th expired yesterday (end of July).
Yet here they are (1st Aug) still featuring it (total rate 4.5%) splashed across their website.
Misleading advertising?
Rate dropped back to 3.4% at midnight last night from what I can see. Pretty clear cut case I reckon.