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: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news