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

 


While you were sleeping: Fed support intact

While you were sleeping: Fed support intact

April 10 (BusinessDesk) – Wall Street rose, extending gains after the latest Federal Reserve meeting minutes eased concern that US policy makers had been planning to raise interest rates sooner than had been anticipated.

The Fed released minutes from the March 18-19 Federal Open Market Committee meeting at 2pm Washington time. Fed Chairman Janet Yellen’s comments at the end of that meeting, saying rates could rise as early as the first half of 2015, had triggered concern the central bank was becoming less accommodative.

And the FOMC minutes showed some policy makers were wary of exactly that misinterpretation by investors.

“A number of participants noted the overall upward shift since December in participants’ projections of the federal funds rate included in the March SEP [summary of economic projections], with some expressing concern that this component of the SEP could be misconstrued as indicating a move by the Committee to a less accommodative reaction function,” according to the minutes released today. “However, several participants noted that the increase in the median projection overstated the shift in the projections.”

“Most participants favoured providing an explicit indication in the statement that the new forward guidance, taken as a whole, did not imply a change in the Committee’s policy intentions, on the grounds that such an indication could help forestall misinterpretation of the new forward guidance,” the minutes showed.

In afternoon trading in New York, the Dow Jones Industrial Average added 0.97 percent, the Standard & Poor’s 500 Index rose 0.75 percent, while the Nasdaq Composite Index increased 1.36 percent. The Dow was up about 0.5 percent prior to the Fed minutes being released.

Shares of Merck and Boeing advanced, last up 2.9 percent and 2 percent respectively, propelling the Dow higher.

“People are taking solace in the idea that the Fed may be more accommodative than previously thought, for longer than previously thought," Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group in Greenwich, Connecticut, told Reuters.

Two-year notes also rose as a result, pushing yields three basis points lower to 0.37 percent.

“It’s dovish for the rates market because it initially sold off because they thought participants were expecting a sooner and faster hiking cycle,” Shyam Rajan, an interest-rate strategist at Bank of America, one of 22 primary dealers that trade with the Fed, told Bloomberg News. “The fact that they are playing it down is bullish.”

There were more reasons for optimism. Shares of Alcoa rose, last up 3.4 percent, after the company reported earnings that were better than anticipated, setting a positive tone to the start of the quarterly US results season.

In Europe, the Stoxx 600 Index finished the session with a 0.4 percent increase from the previous close, as did France’s CAC 40. Germany’s DAX rose 0.2 percent, while the UK’s FTSE 100 gained 0.7 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Drones: First Certificate Issued Under New UAV Rules

Transport Minister Simon Bridges and Associate Transport Minister Craig Foss say the first certified flight of an unmanned helicopter under new aviation rules is a great example of how they can enable commercial use. More>>

ALSO:

GE Swedes And Cow Deaths: Plant Analysis Backs Up Earlier Advice

The industry body is recommending that farmers do not feed Herbicide Tolerant (HT) swedes to cows in spring when the animals are in late pregnancy or early lactation. DairyNZ is also advising caution if farmers are considering other leafy varieties. More>>

ALSO:

Statistics: Dairy And Travel Still Our Largest Export Earners

New Zealand earned $2.3 billion more from exports than we spent on imports during the year ended June 2015... total exports of goods and services were $67.5 billion, while total imports were $65.1 billion. More>>

ALSO:

Approval: Air New Zealand And Air China Launch New Alliance Route

Air New Zealand and Air China have today launched joint sales for a new daily direct service between Auckland and Beijing after receiving approval from New Zealand Minister of Transport Hon Simon Bridges to form a strategic alliance. More>>

ALSO:

Money Trading: FX Trader Jin Yuan Finance Warned Over Lack Of Monitoring

Jin Yuan Finance, an Auckland-based foreign exchange trader, has been warned over its lack of anti-money laundering processes in place in the first public notification by the Department of Internal Affairs. More>>

ALSO:

Auckland Surge, Possible Peak: House Values Accelerate At Fastest Annual Pace In 8 Years

New Zealand residential property values rose at their fastest annual pace in eight years in August, pushed higher by overflowing demand in Auckland, which is showing signs speculators think it has reached its peak, according to Quotable Value. More>>

ALSO:

Cash Money: Reserve Bank Launches New $5 And $10 Banknotes

The $5 and $10 final banknotes were revealed at an event at the Bank in Wellington, and will start to be released from mid-October 2015. More>>

ALSO:

Truck Sales Booted: Commerce Commission Files Charges Against Mobile Trader

The Commerce Commission has filed charges against a mobile trader, or truck shop operator, claiming he obtained money from customers by deception and never intended to supply them with the goods they paid for. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news