German Finance Minister said ESM could come into force within next few weeks as wide expected.
Market is waiting for US FED tonight and 75% of people are expecting Bernanke will take action. The latest surveys show that people are also looking for open ended purchases in the vicinity of 30 billion in treasuries and 35 billion in mortgages. The minority expects a fixed amount of stimulus circa 600-700 billion.
USDMYR on the back of market’s anticipation of QE3 also opened lower with Ringgit stronger against the Dollar at 3.0750. Expect 3.0500 to hold a strong support for now and the new trading range of 3.0500-3.1000 to hold for this week at least.
The S&P index closed a few points higher to 1,436 and Gold closed at 1,734 as it continues its rally back towards USD1800/oz as QE and low rates environment is a stimulus for Gold rally.
US Equities continue its gains with the Dow +0.07%, S&P +0.21% and Nasdaq +0.32%. Leading gains were telecommunication and industrial stocks, while consumer staples and utilities fell. Apple saw a late-day rally of 1.4% after unveiling the long-awaited iPhone 5
This morning RBNZ left the cash rate unchanged at 2.50%, as expected. Statement had no real surprises and Bollard noted that the high NZD is encouraging import substitution and making life tough for exporters.
They have also lowered their GDP forecasts a touch for the out year. The RBNZ’s own 3 month bank bill forecast is for the cash rate to lift by only 25bp by the end of next year.
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