Here's my summary of the key news overnight in 90 seconds at 9 am, including news markets are becoming yield conscious.
William Dudley, the president of the New York Federal Reserve, said that the timeline set out by Ben Bernanke for tapering QE was only “one possible outcome”. Dudley's intervention was the latest attempt by the world's monetary authorities to try to stem the recent rise in government bond yields.
Central bankers are fearful of the consequences, finance ministers of debt laden countries even more so. And bond investors are quickly tiring of low yields when they look likely to come with capital losses.
Investors are jumping to equities - the Dow is up over 15,000 again - and to property, although rising mortgage rates are a threat there. (Even the RBNZ now says higher rates are the wrong way to tackle the sharp run-up in house prices here.) US stocks rose because of upbeat economic data on housing, jobless claims and consumer spending.
Gold fell below US$1,200/oz at 6am this morning although it is hovering just above that level currently. It has been a big fall - about another 2% - and was triggered by the big US Treasury auction which saw yields rise. Gold has no yield, and along with the prospect of further capital declines, investors dumped the yellow metal. But it more than investors who are losers; central banks with large holdings are facing embarrassing writedowns.
China is still doing its bit to hold interest rates down after its liquidity scare of last week.
EU finance ministers say they have agreed on how to rescue troubled banks in any future crisis - without leaving taxpayers to face the bill. But they are still struggling to rescue troubled countries and France's troubles seem to be growing.
Also out overnight, new international bank rules on leverage are expected to put a squeeze on big European banks who may have to scramble for new capital. American banks have had leverage rules for a long time. But big American banks don't get off scot-free - those same rules undermine how they have been netting derivative positions, so there will be a capital scramble on their side of the Atlantic too.
This hunt for new capital is another market pressure that is likely to raise yields.
The NZ dollar starts ends the month pretty much unchanged from yesterday at 77.8 USc, 83.9 AUc, and the TWI is at 73.5.
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