Daily Market Review - 24 June 2010: Fed: US is hurt by the Europe’s debt crisis.

Federal Reserves keeps the key rate at near zero as general investors expected. Whilst the debt crisis in Europe remains unsettled, the Fed takes a relatively conservative view upon the economy, as contemporary crises are highly contagious and US may take the hit. The Fed therefore reiterated that they key rate would stay “exceptionally low” for an “extended period” to underpin the economy. The latest economic figures are disappointing. For instance, a massive drop of 32.7% in May new home sales in May falls short of the market estimates. On another hand, the Group of 20 nations will discuss about the possibility of budget cut and more flexible currency. All issues discussed are influential to the global economy.

As for the Asia Pacific region, New Zealand reported a 0.6% GDP growth in the first quarter. It is the fourth straight month of economic growth and it adds investors’ worries over a possible rate hike. Japan’s export growth has slowed for the third straight month. The export grows 32.1% yoy in May, whilst the April yoy growth was 40.4%. As uncertainties surround, most of the Asia equity ended the day flat.