Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news the US Federal Reserve has announced it is ready to provide more stimulus to support a lagging US economy, but it stopped short of announcing action to ease further.
Markets have been speculating the US Federal Reserve will print up to 2 trillion US dollars to buy US Treasury bonds in an attempt to further reduce already low long term interest rates to boost economic growth. But the Fed held back from announcing the details.
Some were hoping for a second round of quantitative easing known as QE II. But although the Fed is building up steam, it has not released the mooring ropes and the ship remains stuck at the dock.
The Dow initially rose on the suggestion of more money printing to come, but sagged on the realisation that the Fed was all talk and no action. It closed almost flat.
However, the New Zealand dollar rose around half a US cent to 73.4 USc as international investors digested the prospect of a devalued US currency. The US dollar fell to a six week low vs the euro.
Gold hit a fresh record high of US$1,290 overnight as some investors avoided fiat currencies in favour of something harder they believe is inflation proof.
Meanwhile, in another sign of political turmoil inside Barack Obama's administration, National Economic Adviser Larry Summers is expected to resign after congressional elections in November, Bloomberg reported.
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