Here's my summary of the key news overnight in 90 seconds at 9 am, including news the US Federal Reserve's Open Markets Committee (FOMC) has released its latest monetary policy decision for the world's biggest economy.
The Fed is sticking with its plan to buy US$40 billion worth of bonds every month until it can signficantly reduce unemployment, regardless of whether the US economy is recovering. It also maintained its pledge to keep its official interest rate near zero until mid 2014.
The FOMC said the US economy was growing modestly, but unemployment remained elevated. However, Fed Chairman Ben Bernanke may not be around to see through his policy of a third unlimited round of monetary policy easing known as Quantitative Easing 3 (QE III) and 'ZIRP' (Zero Interest Rate Policy) until mid 2015. See more here at Bloomberg.
His current term expires in early 2014 and Republican Presidential candidate Mitt Romney has said he will not reappoint Bernanke if he wins the Presidency. Bernanke has also told friends, according to the New York Times, he will not put himself forward for reappointment, regardless of who wins the November 6 election.
Meanwhile, the US government is suing Bank of America for US$1 billion, alleging the bank shuffled on defective mortgages to the government controlled Fannie Mae and Freddie Mac between 2007 and 2009 in a programme described as 'The Hustle'. See more here at Reuters.
Elsewhere, US stocks were firmer in early trade after Chinese factory output (as measured by HSBC's PMI index) contracted by less than some expected. However US stocks weakened around 0.3% in the last hour of trade as investors sifted through the FOMC's comments about only moderate growth. See more here at Bloomberg.
Gold prices fell again overnight to a 6 week low after the European Central Bank said its own 'Big Bazooka' bond buying plan would not create inflation. The ECB even warned of deflationary pressures, which would not help the gold price. Gold briefly dipped below US$1,700/oz. See more here at Bloomberg.
The New Zealand dollar was marginally firmer around 81.6 USc in morning trade.
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