US grows strongly in Q3; lowest jobless claims in 14 yrs; oil output surges to 30 yr high; banks back in firing line; Brazil raises rates, gold sinks; NZ$1 = US$0.785, TWI = 76.5

Here's my summary of the key news over night where its all about the US today.

The American economy grew at an annual rate of +3.5% in the third quarter, a better figure than economists were expecting. It had grown at an even faster +4.6% annual pace in the second quarter.

These Q3 numbers were driven in part by an unusual spurt of federal spending, combined with strong exports, along with investment in business equipment, but the numbers showed that consumer demand (PCE) did not grow quite as strongly, perhaps hinting at some loss of momentum.

In fact, last week, initial jobless claims in the US were marginally higher. Still, over the past month fewer Americans filed applications for unemployment benefits than at any time in more than 14 years.

Wall Street rose, and gold sank. Oil also slid as the Federal Reserve ended its bond buying and American oil production surged to the highest level in more than 30 years.

The NY Times is reporting that just two years after avoiding prosecution for a variety of crimes, some of the world’s biggest banks are suspected of having broken their promises to behave, prompting prosecutors to revisit earlier settlements.

There are some big-name banks involved, including Standard Chartered, Barclays, and UBS. Auditing firm PwC is also drawing the ire of regulators for fudging reports on alleged bank sanctions-breaking activity. This may become a big story in the next week or so.

The only notable news outside the US today comes from Brazil where there was an unexpected jump in their official interest rates. Brazil’s central bank increased its benchmark rate by 25 basis points to 11.25%, surprising analysts who had predicted no change following their recent federal election.

In New York, UST 10yr bond yields have slipped following the US GDP announcement today and are now at 2.29%.

The oil price fell and is now just above US$81/barrel with the Brent price just under US$87/barrel. American output data released earlier today shows strong gains in their domestic production.

The gold price also fell sharply again and is now below the US$1,200 level at US$1,196/oz.

We started today with our currency holding its sharply lower level of the past few days. It is now at 78.5 USc, at 88.9 AUc, and the TWI is at 76.5.

If you want to catch up with all the changes yesterday we have an update here.

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