Here's my summary of the key events overnight that affect New Zealand.
Federal Reserve officials are divided on how quickly inflation will pick up. According to minutes from the US central bank’s last policy meeting on September 19 and 20, a number of officials are concerned the current low levels of inflation might reflect “the influence of developments that could prove more persistent”. While many officials support another rate hike this year, they recognise “some patience in removing policy accommodation” is warranted.
At their last meeting, officials kept rates on hold, but announced they would start reducing the Fed’s large bond portfolio mostly amassed after the financial crisis.
The Bank of England is preparing to hike interest rates next month for the first time in more than a decade. However the move is expected to be taken from a position of weakness, rather than strength, as the UK’s inflation is coming from weak productivity and Brexit.
The euro has been propelled by Catalonia’s leader holding off moves to make a formal independence declaration. While disappointing pro-independence supporters, the decision has pleased markets. Nonetheless, the saga is far from over. The Spanish Prime Minister has given the Catalan government eight days to drop its independence bid, before it suspends the region’s political autonomy and rules it directly.
It has been revealed Westpac trialled the deposit machines at the centre of the Commonwealth Bank of Australia’s money laundering scandal. Westpac’s CEO says the bank “experimented” by installing about seven of the machines, but dumped them for “risk and operation reasons”. Australia’s financial intelligence agency alleges the machines, which accept deposits of up to $20,000, saw criminals launder money through CBA.
In New York, the UST 10yr yield remains at 2.34%.
The price of crude oil remains at US$51 a barrel, while the Brent benchmark is just under US$57.
The price of gold has eased back to US$1,286/oz.
A combination of world events has resulted in the NZD not moving much since this time yesterday. It remains at 70.8 US¢ and 90.9 AU¢, but has continued to fall to 59.7 euro cents. The TWI-5 index is at 73.4.
If you want to catch up with all the changes yesterday we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».