Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with BNZ, including news the eyes of the financial world are now firmly on the US Federal Reserve's monetary policy statement due tomorrow morning New Zealand time.
Many are expecting the Federal Reserve to announce new monetary stimulus that could include bond buybacks of mortgage bonds or US Treasury bonds.
Unless this is 'sterilised' with offsetting bond sales, this is effectively printing money or quantitative easing (QE). This would be seen as the second round of money printing or QE II.
This could further undermine the value of the US dollar, seen as the world's reserve currency, and may help further boost the price of gold and other hard commodities.
The New Zealand dollar was reasonably firm at 72.9 USc in morning trade. See our interactive chart below and here.
Meanwhile, back in New Zealand, Allied Farmers announced it had suspended its plans to raise up to NZ$19 million in fresh equity from shareholders after its finance company Allied Nationwide was forced to suspend its prospectus for regular fund raising because its trustee said it had breached its trust deed.
Allied Farmers now faces a nervous few weeks in the hands of Allied Nationwide's trustee, Guardian Trust, ahead of the October 12 expiry of its government guarantee. Many Allied Nationwide debenture investors will be hoping Guardian Trust finds a trigger to pull to put Allied Nationwide into receivership and therefore force a government payout under the guarantee.
Many Allied Farmers and former Hanover Finance investors, who are now Allied Farmers shareholders, will be hoping Guardian Trust can't find a trigger.
Also, back in New Zealand, Westpac, ANZ and TSB have announced mortgage rate changes in the wake of the Reserve Bank's OCR hike and subsequent falls in longer term wholesale rates as markets saw a slower and lower rise in the OCR in future. See all the rate changes here and all bank mortgage rates here.
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