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ECB promises large-scale bond buying; UK probes bank dominance; China juices up its liquidity; UST 10yr 2.37; NZ$1 = US$0.770, TWI = 76.5

ECB promises large-scale bond buying; UK probes bank dominance; China juices up its liquidity; UST 10yr 2.37; NZ$1 = US$0.770, TWI = 76.5

Here's my summary of the key news overnight with news of big talk but no real action

Early this morning, the ECB did its latest policy review. It moved closer to the kind of large-scale government bond purchases used in the United States and left its benchmark interest rate unchanged. But in the end it actually made no changes. 

The Bank of England held pat as well. But regulators there are in the final stages of setting the penalties for the currency manipulation charges. Six banks are involved - UBS, RBS, Barclays, CitiGroup, HSBC and JPMorgan - and the penalty will be up to £250 mln (NZ$500 mln). Formal announcements may not be made until American regulators have set their course of action - and that may include criminal charges.

Yesterday we reported that the US Fed had adopted a rule that no US bank could dominate more than 10% of the US banking system. Today comes news that British authorities are also looking into the dominance issue.

China’s central bank vowed yesterday to lower funding costs for corporate borrowers amid increasing pressure on the nation’s slowing economy. In a report on third-quarter monetary policy, the People’s Bank of China also confirmed it had already conducted two rounds of liquidity injections into the country’s banking system in September and October totaling NZ$160 bln in a bid to get interest rates lower and bolster more economic growth.

Yesterday, September data showed that Australia added more jobs than projected in October and unemployment held steady. But doubts remained about data which showed big swings in state jobless rates.

In the US the number of Americans filing new claims for unemployment benefits fell more than expected last week and compensation accelerated in the third quarter, in the latest signs of tightening American labour market conditions.

In New York, UST 10yr bond yields were again flat-to-rising in trade today and are currently at 2.37%.

The oil price is unchanged today staying firmly at its new lower levels at just over US$78/barrel with the Brent price just over US$83/barrel. It seems that US$70/barrel is the pain point at which OPEC will start limiting output. That's a level that would drop the NZ pump price to $1.95/litre and hold our inflation level low.

The gold price continued its decline and is now below US$1,143/oz.

Following on from the surging US dollar, we lost more ground against the greenback today and are now at out lowest value since June 2012. It is now at 77.0 USc, at 89.8 AUc, but the TWI is still at 76.5.

If you want to catch up with all the changes yesterday we have an update here.

The easiest place to stay up with today's event risk is by following our Economic Calendar here »

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6 Comments

Early this morning, the ECB did its latest policy review. It moved closer to the kind of large-scale government bond purchases used in the United States..

 

Seems it's large-scale in all spheres in Europe.

An unprecedented international investigation into tax deals struck with Luxembourg has uncovered the multi-billion dollar tax secrets of some of the world’s largest multinational corporations. Read more

 

The European Union is accused of “breathtaking hypocrisy” for continuing to demand that David Cameron pays a £1.7 billion bill despite its own auditors failing to give a clean bill of health to more than £100 billion of spending by Brussels.

According to the annual report of the European Court of Auditors, seen by The Telegraph, £5.5 billion of the EU budget last year was misspent because of controls on spending that were deemed to be only “partially effective” by experts. Read more

 

But it's hard to beat the BLS for the tangled web of deception it weaves.

Manipulating the Consumer Price Index: Hedonic Quality Adjustments

Have you heard the one about CPI?

Suppose that a TV manufacturer retires a product and replaces it with a newer, better, and much more expensive one. If the new TV costs 5 times more than the old one, how can we manipulate the hell out of massage the price of the old TV to make it look like the price fell? By using the dark arts of econometrics, my son!  Read more

 

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I saw the analysis of Australian companies using Luxemburg scheme

http://www.afr.com/p/national/international_pwc_tax_schemes_exposed_Em8…

I don't think we will be seeing New Zealand companies' Luxemburg tax avoidance anytime soon, as the New Zealand person working on this was Nicky Hager and currently all his computers are seized by police.

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I would assume he backed up his data and purchased a new computer by now..I doubt the police will return his gear in a useable state?

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If its damaged I'd assumed he can sue them.

In any event he'll need to throw away the hard drive and do a bare metal rebuild on a new one.

Wouldnt it be Pointless buying a new PC right now? the Police could just raid him again taking it.

regards

Steven

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DP

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As long as we have corrupt governments from the UN to the EU to all Sovereign governments we will not end corporation tax avoidance/evasion.

 

The aristocracy took power from the corrupt kings and set up government. Now the government has become the corrupt king. Time for a change.

 

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