sign up log in
Want to go ad-free? Find out how, here.

90 seconds at 9 am: No tapering from US Fed, sticks with job growth plan; Dow hits record, US dollar falls; AU car decisions due; NZ$1 = US$0.836 TWI = 77.6

90 seconds at 9 am: No tapering from US Fed, sticks with job growth plan; Dow hits record, US dollar falls; AU car decisions due; NZ$1 = US$0.836 TWI = 77.6

Here's my summary of the key news overnight in 90 seconds at 9 am, including news of a Fed announcement that has surprised markets.

There was no tapering announced by the US central bank. Rather it has stayed focused on reaching its jobs target and getting unemployment down to 6.5% in America.

The immediate reaction by markets was sharp cheering. The Dow hit an all-time record high, gold jumped US$40+/oz, and oil rose US$3/barrel.

The jump in asset prices in US dollars however won't be reflected here, because the NZ currency was also one of those that rose on the announcement, surging up over 83 USc. The rise by the Kiwi was broad based, gaining against all its main benchmarks, including the Aussie. The TWI is now sitting at 77.4.

US interest rates have only moved marginally higher, the UST 10yr up to 2.87% in mid-day trade after the Fed announcement. Most US observers now expect the Fed to raise its benchmark 0.25% rate in 2015. First bond tapering must get started and the free money end, then rate rises. Also, there is a little matter of negotiating through the US debt limit politics, and the Republican-controlled House is getting even more obstructionist.

Data for American housing starts and building permits issued came in higher in August but were below analysts expectations.

In other news, Fitch's respected analysts Charlene Chu is warning that China's credit boom is still growing 50% faster than its economy in August and because it has been doing that for 5 straight years, it can't be sustained at this pace.

General Motors has renewed its commitment to its electric car program, even though it has been a big disappointment on sales so far. In a similar move, later in the day China also committed to extend and expand its subsidies for electric cars, but is excluding hybrids from that program.

And speaking of cars (and subsidies), big decisions are about to be made in Australia about the future of their car industry. It seems unlikely the new government will continue to stump up the subsidies needed to keep companies like Holden manufacturing in Australia.

The NZ dollar starts today at 83.6 USc, 88.1 AUc, and the TWI is at 77.6. its highest level since mid May. The all-time record high was 86.3 USc with the TWI at 79.3 on April 12 earlier this year.

The easiest place to stay up with today's event risk is by following our Economic Calendar here »

No chart with that title exists.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

18 Comments

Up
0

wheeler needs to get on his bike and Slash the OBR 1% now   , sorry all you punters that fixed at 6.5 !

Up
0

Roger! Roger!

Come out! come out!

wherever you are?!

 

Up
0

As an ex smoker I know how Ben feels ... you want to give up and you even tell your friends that you are going to and then the day comes and it's just not quite the right time, there's a party on or any other reason you can think of .... tapering - yeah right!

Up
0

Bernanke can't get off the bike, without it crashing.

 

Ever.

 

Economics, meet the real world.

 

A bit like Nick Smith, meet the real world. He opened the 'Valuing Nature' conference, with a piece of drivel about how he doesn't want to hear anything of the Limits to Growth. Then he goes out and champions a series of one-off, never repeatable, physical actions.

 

I suggest we have a Minister suffering from cognitive dissonance, I suggest he seeks treatment.

Up
0

Worse really.

The very fact that he say's he doesn't want to hear anything of the "Limits to Growth" means he is aware of it and understands it.  Which as a member of Govn and cabinet makes him cupulable/liable in my eyes for the willful ignoring of the excess damage and hardship that will result.

What more can be said when the ppl who are meant to look after our Nation actually seriously damage  it.  I cant see how they can defend themselves before a court, even if its only that of public opinion.

regards

 

 

 

Up
0

Bernanke can't get off the bike - it's a fixed-wheel - no brakes - and it's all down hill

It's like one of those long-ago nightmare road trips where you are 100 kms since the last petrol station and you are sniffing empty - as you sweep around each bend in the road you desperately look for the next rural village hoping for a petrol station - the further you go the futility of turning back increases - finally you come to a village - but the only petrol station is closed

Up
0

I dont think the investors in Aucklands Viaduct area will be too worried by  your Limits to Growth soon steven -   GO NZ  - (tomorrow)

Up
0

Buy tulips, they are a great price at the moment.

regards

Up
0

I can't, my tulip portfolio is already at 80% LVR, I have to revalue my existing tulips before I buy any more.  So I'm just growing them now...  but despite what you say there doesn't seem to be a limit to the number I can grow?

Up
0

The irony  Gonzo, of  Aucklanders screaming for Team N.Z's returning the Cup and the rate rise that comes with it is not lost on me at all....

Old Brown nose is going to stick it to us again with more development  to accommodate future spectators and ...things they might buy.

We have plenty of bloody hills, why can't  they just go stand on them at no cost to the ratepayer....? you see it all..! 3D too...!

 If it is truly N.Z.'s cup........levy them all ,top to bottom.

Up
0

?  dont get that one

Up
0

we are leading the interest rate up in godzone, very strange the amerians didnt follow our lead.

well best we carry on regardless, they will come to there senses!!

Up
0

Yes, because economic, political and social circumstances and developments in the US are so exactly similar to those in New Zealand that the two Governments should always undertake the same policy interventions at the same time.

Up
0

Thanks(?!?) for the read Andrew!

What a prospect to still live in a world that has learnt shit-all since 2008! A ticking bomb that will only remain a fizzer if all layers of the system remain stable. Beautiful... get me a gun someone...

Up
0

How to get free air travel, the pudding edition:

http://gizmodo.com/how-an-engineer-earned-1-25-million-air-miles-by-buying-1339646546

"Doing this counted as a considerable charitable donation"

Up
0