The minutes from the US Federal Reserve FOMC meeting on 21st September were released overnight without controversy. As expected the Fed said additional easing may be necessary if the outlook worsens. The market is expecting an announcement of an additional US$500 - US$750bn QE at the November 3 meeting as slowing growth requires additional stimulus.
Although the minutes were well telegraphed the dollar still fell at least 1.5% against all currencies other than the next worse currency in the world - the pound. The pound’s performance over the past month has been quite frankly pathetic. If it wasn’t so disliked it would have rallied by similar amounts to every other currency against the dollar and sterling would sit at $1.70 rather than $1.58. This is down to QE again. Traders expect an announcement of more QE from the Bank of England in the very near future.
September Nationwide consumer confidence came in at the lowest level since March last year at 53 overnight.
Greece held a successful bond auction yesterday which was lauded by analysts as positive and an indication that investors were more confident Greece’s economy was on track to rebound. Cynics will note the Chinese support for Greek debt as a nice way to weaken the Yuan against the Euro. Fair enough a market is after all determined by supply and demand regardless of who is buying and what their reasons are.
The Australian dollar has surged to a 28-year high as the US dollar crumbles. The Aussie parity party (1 AUD=1 USD) is likely to be this weekend with 0.9916 the high so far. The only party tonight in Australasia will be a BBQ of lamb chops rather than prawns after the NZ Sevens rugby team won their 4th consecutive gold medal narrowly beating the Aussies in an incredible match.
An article in the Melbourne Age clearly highlights the stark difference between the economies of Asia/Pacific and the West. Insurance group QBE has forecast Australian house prices to rise 20% in the next 3-years.
An armless pianist who lost both his arms at the age of 10 when he was electrocuted during a game of hide-and-seek has just won “China’s Got Talent”. Liu Wei 23, defeated 7-year-old stand-up comedian Zhang Fengxi at the final in Shanghai.
cat (Catharine Higginson) #1