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


While you were sleeping: Investors on Fed watch

While you were sleeping: Investors on Fed watch

Aug 20 (BusinessDesk) – Equities and bonds fell as investors await signals from the US Federal Reserve, perhaps later this week, about plans to pare its bond-buying program.

First, on Wednesday in the US, minutes of the latest Fed meeting, held July 30-31, will be released. Bond watchers expect the Fed to pare the monthly target of purchases by US$15 billion to US$70 billion, in keeping with recent comments by Fed Chairman Ben Bernanke that the central bank wants to ease back this year and end bond buys by mid 2014.

But the Fed minutes aren't all that's on deck. Investors also will be eying this week's annual meeting of global central bankers and policy makers in Jackson Hole, Wyoming, for fresh indications about plans for monetary stimulus in the world's largest economies.

“The focus this week is on what’s going to happen with the Fed minutes and at Jackson Hole,” Niels From, chief analyst at Nordea Bank in Copenhagen, told Bloomberg News.

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.25 percent, while the Standard & Poor's 500 Index shed 0.30 percent. Declines in shares of JPMorgan Chase and Alcoa weighed on the Dow. The Nasdaq Composite Index rose 0.16 percent, helped by further gains in Apple.

US Treasuries fell, pushing yields on the benchmark 10-year bond four basis points higher to 2.86 percent. German government bond yields also are rising, having touched 1.92 percent overnight.

In Europe, the Stoxx 600 Index ended the day with a 0.5 percent drop from the previous close. Germany’s DAX declined 0.3 percent, the UK's FTSE 100 Index fell 0.5 percent, while France’s CAC 40 dropped 1 percent.

Germany's central bank, the Bundesbank, is forecasting steady growth for the nation after a strong second quarter where the economy expanded 0.7 percent.

Commodities including copper, silver and gold also fell amid expectations that a cutback in Fed stimulus might dampen demand for raw materials. Three-month copper on the London Metal Exchange closed 1.3 percent weaker at US$7,305 a tonne, according to Reuters.

In a paper released today, the Fed said large banks have more work to do to shore up their capital planning processes. In particular, the Fed said firms need to improve "their accounting for risks" to specific business activities.

The Fed will conduct its next review of the strength of US banks later this year. This year the Fed will review the finances of 30 banks, 18 of which participated earlier and 12 additional ones with more than US$50 billion in total assets.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Commerce Commission: Appeals Record $2.25m Fine In Vodafone FibreX Case

The Commerce Commission has filed an appeal in the High Court against a record $2.25 million fine imposed on Vodafone NZ Limited (Vodafone) for its offending under the Fair Trading Act during its FibreX advertising campaign. While the sentence imposed in the Auckland District Court on April 14 was the largest-ever fine under the Fair Trading Act, the Commission will argue that it is manifestly inadequate... More>>

All District Health Boards: Historic Pay Equity Settlement

An historic agreement has been ratified that addresses a long-standing undervaluation of a workforce that is critical to the smooth running of our hospitals and the delivery of healthcare... More>>

MPI: Dry Autumn In Waikato And South Auckland Leads To Drought Classification Drought conditions affecting the primary sector in the Waikato and South Auckland were today classified as a medium-scale adverse event, enabling a package of support for farmers and growers... More>>

Barfoot & Thompson: Rents Up By Around 3% In Most Areas

The average weekly rent paid for homes in most areas of Auckland has risen by around 3 percent year-on-year. The figures for end March from more than 16,000 properties... More>>

DoC: Smeagol The ‘Gravel Maggot’ Leaves Its Rare Mark On The Remote West Coast
An extremely rare species of sea slug or ‘gravel maggot’ has been detected for the first time on a remote beach in South Westland... More>>

Immigration: Annual Net Migration Loss Of 7,300

The provisional net loss of 7,300 people in the year ended March 2022 was the lowest net migration for a March year since 2012, Stats NZ said today... More>>