Morning all
thanks usual suspects
The ASX looks set to open higher following the Fed decision to raise interest rates for the first time in nine years.
Dec. SPI futures currently 51 points higher
Currently, US markets are trading stronger into the close
In overnight news, the Euro zone consumer price index for November came in at down 0.1%, month-on-month and up 0.2% year-on-year. The report suggests deflation remains a serious concern in the European Union and that the European Central Bank is likely to embark upon more monetary policy stimulus measures sooner rather than later. The ECB wants to see an annual inflation rate of 2.0%.
DAX + .2%
FTSE + .65%
The Federal Reserve hiked interest rates for the first time in nearly a decade on Wednesday, signaling faith that the U.S. economy had largely overcome the wounds of the 2007-2009 financial crisis.
The U.S. central bank's policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point to between 0.25 percent and 0.50 percent, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.
"The Committee judges that there has been considerable improvement in labor market conditions this year, and it is reasonably confident that inflation will rise over the medium term to its 2 percent objective," the Fed said in its policy statement, which was adopted unanimously.
The Fed made clear that the rate hike was a tentative beginning to a "gradual" tightening cycle, and that in deciding its next move it would put a premium on monitoring inflation, which remains mired below target.
"In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate," the Fed said.
The dollar firmed modestly after the rate rise. Based on interest rate futures markets, traders expected a second hike in April.
The median projected target interest rate for 2016 remained 1.375 percent, implying four quarter-point rate hikes next year.
To edge that rate from its current near-zero level to between 0.25 percent and 0.50 percent, the Fed said it would set the interest it pays banks on excess reserves at 0.50 percent, and said it would offer up to $2 trillion in reverse repurchase agreements, an aggressive figure that shows its resolve to pull rates higher.
S&P 500 +1.5%
Nasdaq +1.65%
Oil fell more than 3 percent on Wednesday, snapping a two-day rebound after U.S. government data showed a surprise weekly build in crude inventories and the Federal Reserve raised interest rates for the first time in nine years.
Oil traders were already worried about a growing global glut of oil which has pressured prices in recent weeks. Data from the U.S. Energy Information Administration showed crude inventories up 4.8 million barrels last week. Analysts in a Reuters poll had forecast a decrease of 1.4 million barrels. U.S. crude futures settled down nearly 5 percent, or $1.83, at $35.52 a barrel, not far from the $32.40 hit during the financial crisis in 2008.
Copper and other base metals were largely flat or modestly weaker.
Gold prices were trading higher in afternoon dealings Wednesday and holding on to early gains in the aftermath of the first interest rate increase from the U.S. Federal Reserve since 2006. Short covering and position evening in the futures markets, and bargain hunting in the cash markets, were featured in gold and silver ahead of this afternoon's FOMC statement.
Gold $1069
HUI + 3%
AUD gold $148214
Todays news
US
unemployment
current account
Have a good day
Reuter, SMH , *****
AUD 72.
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