FED ANNOUNCES NEW SCHEME OF QUANTITATIVE EASING - Two years ago we did not really know what it was, but now we are so familiar with quantitative easing it has a nickname - QE2. The Federal Reserve launched a controversial new policy to buy $600 billion more in government bonds by the middle of next year, as it tries to breathe new life into a struggling US economy.
Art Hogan of Jeffries and Co in the US says that the Fed will start buying up two-year, five-year and ten-year bonds every month until the end of June. He says the $600 billion figure is a little more than had been expected, but the time frame for the purchases is a little longer. He says the Fed is not happy at the slow pace of economic recovery as it is not moving fast enough to generate new jobs.
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ECB MAY STEP UP PURCHASES OF BONDS - The governing council of the European Central Bank also meets today to talk about rates. It is expected the Central Bank will leave rates at the record low of 1%, where they have been since May last year. Simon Barry, economist at Ulster Bank, says that the US Federal Reserve has to deal with disappointing economic news, while the news from most of the euro zone has provided some comfort to policy makers as it remains broadly on track. He says the ECB will keep rates at record lows but that its president, Jean-Claude Trichet, will face questions on the ongoing debt problems in the peripheral countries, including Ireland and Portugal. He says the bank may step up its purchases of troubled nations' bonds.
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MORNING BRIEFS - 500 new jobs are being announced in Belfast at US banking group Citi. The group has been in Belfast since 2004 and already employs 900 staff working mainly on business in Europe, the Middle East and Africa. The majority of the jobs are in the technology and operations divisions.
*** After falling in September, business activity in the country's services sector rebounded in October. The latest NCB Services Purchasing Managers' Index rose, but it was noted that the wider economic conditions remained fragile. The index shows new business from abroad expanded for the 14th month in a row and October's rate of growth was described as 'solid'. But this was not enough to offset the weakness in domestic new orders which resulted in total new orders contracting for the second month in a row.
*** Singapore remains the best country in which to run a business with the Asian nation coming top of the World Bank's Doing Business 2011 study, which rates 183 countries on the ease in which they allow firms to operate. Ireland comes ninth in the list.
*** On the currency markets this morning, the euro is trading at $1.4133 cents and 87.67 pence sterling.
