- US Equities dropped sharply lower on Wednesday as the Fed painted a bleak picture on the economy, while the new measures failed to convince markets. The S&P ended 3% lower led by a 5% sell-off in financials’ shares. This morning, also Asian shares are losing ground.
- The US Federal Reserve launched “Operation Twist” yesterday evening in a bold attempt to drive down long-term interest rates and revive the faltering economy. The Fed said it would buy $400 billion of long-dated Treasuries financed by the sale of an equal amount of bonds with three years or less to run. More surprising, the central bank pledged to reinvest any repayments from mortgage securities back into debt issued by mortgage financiers.
- Greece decided yesterday to cut pensions, tax low-income earners and put thousands of public workers in a special labour reserve this year as the country scrambles to meet fresh austerity demands from its international creditors in exchange for aid.
- The Minutes of the latest Bank of England meeting showed that most policymakers believed the stresses of the past month has strengthened the case for a return to the policy of quantitative easing.
- Moody’s Investors Service cut debt ratings for Bank of America, Citigroup and Wells Fargo say- ing that the US government is more likely now than during the financial crisis to allow a large bank to fail should it become financially troubled.
- Brent crude oil prices ($108.65) dropped sharply too as the Fed failed to convince markets with new initiatives. Gold prices ($1175.50/ounce) on the contrary, were unable to profit from the flight to safety.
- China’s manufacturing sector contracted for a third consecutive month in September while a measure of inflation picked up. HSBC’s China Flash PMI dropped to 49.4 from August’s final figure of 49.9.
- New Zealand’s economy slowed sharply in the second quarter. GDP rose by a seasonally adjusted 0.1% Q/Q, well short of both the consensus estimate and the central bank’s projection, backing views that the central bank will keep interest rates low for longer in the face of global uncertainty. The New Zealand dollar fell sharply.
- Today, the eco calendar contains the advance estimate of euro zone manufacturing and services PMI, the euro zone industrial new orders and European Commission’s consumer confidence. In the US, the jobless claims and leading indicators are on the agenda.
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GD Star RatingForex – Commodities – Stocks: Headlines of September 22nd,