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.

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