Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


While you were sleeping: Yellen lifts equities

While you were sleeping: Yellen lifts equities

Feb 12 (BusinessDesk) – Stocks on both sides of the Atlantic gained as Janet Yellen, the US Federal Reserve’s new chairman, signalled continuity in the central bank’s policy and optimism about the US economic outlook.

“Let me emphasise that I expect a great deal of continuity in the FOMC's approach to monetary policy,” Yellen said in the Fed’s semi-annual testimony to the House Financial Services Committee.

The Fed announced a US$10 billion reduction in its monthly bond-buying program in December, followed by another US$10 billion cut after its next meeting, in January, downgrading the purchases to US$65 billion a month amid signs of improvement in the US labour market.

Policy makers are expected to continue reducing the program at a similar pace.

While the latest non-farm payrolls data for December and January were short of the mark, Yellen expressed optimism about the outlook.

“My colleagues on the FOMC and I anticipate that economic activity and employment will expand at a moderate pace this year and next, the unemployment rate will continue to decline toward its longer-run sustainable level, and inflation will move back toward 2 percent over coming years,” Yellen said. “The recovery in the labour market is far from complete.”

US policy makers have been “watching closely the recent volatility in global financial markets,” Yellen said. “Our sense is that at this stage these developments do not pose a substantial risk to the US economic outlook.”

Yellen will deliver the same testimony to the Senate Banking Committee on Thursday.

In afternoon trading in New York, the Dow Jones Industrial Average climbed 1.02 percent, the Standard & Poor’s 500 Index gained 0.88 percent, while the Nasdaq Composite Index advanced 0.75 percent.

Gains in shares of Boeing, last up 1.9 percent, and those of Chevron, last 1.7 percent stronger, propelled the rise in the Dow.

"It's very obvious she is working from the same playbook as Bernanke," Tom Porcelli, chief US economist at RBC Capital Markets in New York, told Reuters. "The Fed will continue to cut its bond purchases by US$10 billion at each policy meeting the rest of the year."

US Treasuries fell, pushing yields on 10-year bonds 6 basis points higher to 2.72 percent. The greenback also weakened.

“We know Yellen is more on the dovish side, so she wants more information that the labour market is improving, which is reflected in the more cautious side of the statement,” Charles St-Arnaud, a foreign-exchange strategist in New York at Nomura Holdings, told Bloomberg News. “Even though she’s made it clear that the Fed won’t slow the pace of tapering, there’s still stimulus in the pipeline, which weighs on the [US] dollar.”

In Europe, the Stoxx 600 Index ended the day 1.3 percent higher than the previous close. France’s CAC 40 increased 1.1 percent, the UK’s FTSE 100 gained 1.2 percent, while Germany’s DAX jumped 2 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news