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 is sticking with its 'Twist' plan to buy longer term bonds, but is holding off from another round of money printing.
The Federal Reserve released the results of its latest monetary policy committee meeting this morning and detailed its new economic forecasts.
It said growth had been marginally stronger in America in the third quarter, but the Federal Reserve lowered its forecast for growth 2012 to around 2.7%, while it saw the unemployment rate remaining high around 8.6% by the end of next year. See more here at Bloomberg.
Federal Reserve Chairman Ben Bernanke later told a news conference there remained significant downside risks for the global economy and the world's biggest central bank could do more to stimulate growth, but was not willing to do so now.
There was one dissenter who wanted to do more. At the last meeting there were a record three dissenters who opposed the 'Twist' plan.
US stocks were up around 1.5% in late trade, with little to celebrate from the Fed's decision or comments. See more here at Bloomberg.
European stocks bounced somewhat after Tuesday night's savage selloff in the wake of Greece's shock decision to hold a referendum on its Euro zone membership.
The focus is turning to Italy now as its bond yields rise to unsustainable levels over 6%.
Prime Minister Silvio Berlusconi was holding an emergency cabinet meeting this morning to prepare some concessions to take with him to the G20 summit tonight. See more here at Reuters.
Meanwhile, Greece's parliament will hold a confidence vote on Friday night and US non-farm payrolls data is due on Friday night.
Credit Default Swap spreads for Greece surged by 5,700 points to 8,900 points, suggesting most now expect an uncontrolled default and exit from the Euro zone. Italy's CDS rates, which are a measure of bond market confidence, also rose to 515 points. To compare, New Zealand's CDS rates are under 100 points. Interestingly, Germany's CDS rates have risen to near 100 points too.
Meanwhile, the Institute of International Finance (IIF) has warned that plans to recapitalise Europe's banks face serious problems and that banks are instead selling bonds and calling in loans to improve their capital ratios, both of which would worsen Europe's financial and economic crisis. See more here at Bloomberg.
Meanwhile, the New Zealand dollar has dipped under 79 USc and is down from over 82 USc on Monday. Markets will be watching New Zealand jobs figures due at 10.45 am today. The unemployment rate is expected to fall to about 6.4% from 6.5%. See more here in BNZ's market report on our site.
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