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This Program Is Captioned Live. Good morning. Welcome to 'Business Today' for Australia Network. I'm Whitney Fitzsimmons. Coming up on the program, shock decision. US stocks hit new highs after the Fed leaves its stimulus program unchanged. Talking it down. Regulators reject speculation of an Australian housing bubble. And hard yakka. How to entice the next generation of dairy farmers to life of early starts and no holidas. Those stories short shortly but first a look at the markets:

For more on the market action I'm joined by Juliette Saly from Commsec. Good morning. How has that decision by the Fed affected Wall Street? It seems investors really do like cheap money because we saw an absolute euphoria rally on Wall Street overnight. The Dow Jones index hitting a record high, the Dow and Nasdaq both up around 1% as the Fed decided not to taper back that massive bond-buying program as most in the market had expected. We saw material
a big rise coming through from material stocks Home Builders leading the way because the cheaper interest rates are going to put downward on mortgage rates and also a big lift in US treasuries overnight and we saw yields fall on that as well.Let move to I upperand trade stayed near
to I upperand trade stayed 5-year highs there? It 5-year highs there? It did. In European 5-year highs European atrade they're essentially awaiting the
announcement from the Fed and there was a announcement from there was a lot of optimism at that stage that the Fed would that taper as expected that stage that the Fed taper as expected by $10 to billion taper as expected by $10 to $15
billion a up doing anything but we have seen buying coming through. A weakness in buying stocks in London impacted the Footsie. The Footsie was down 0.2 of 1%. The Dax at record highs, and European markets at 5-year highs.How will local market s trade today? We will have a great session. Yesterday we saw trepidation and investors unwilling to take on too much risk until we had the announcement from the Fed. Today it looks like we'll reach 5-year highs. The futures pointing to a gain of more than 1%. What's in store for Asian indice s? We expect the relief rally to continue into the Asian region. We've got a strong showing on the Nikkei futures. A couple of Asian markets won't have a chance to react to the Fed's announcement until next week because we have public holidays in the region. Stocks in mainland China and South Korea closed today for tomorrow for holidays.Come new s? In Australia we have detailed labour wage data coming through for August, economic growth figures coming through in New Zealand and trade balance out of Japan today, Whitney. Thank you. Juliette Saly from Commsec there. Now let's take a look at what's happening with currencies and commodities.

As you've heard, the Federal Reserve has defied all expectations and decided to keep its quantitative easing program at current levels for the time being. News that the Fed's stimulus spending bead maintained at $85 billion month caught markets off guard
with Wall Street jumping to record highs. Markets around the globe were sweating on Ben Bernanke's announcement and when it came there was shock. The committee decided today to keep the target range for the Federal funds rate at 0 to 0.25% and tyke make no change in either asset purchase program or forward guidance regarding the Federal funds rate target. The US Federal Reserve's decision to keep the level of its massive spending program in tact took investors by surprise, sending just stocks to record highs. Defying expectation the Fed's monthly injection of $85 billion into the US economy will be maintained despite strong signs of recovery, the US economy remains weak. The Fed chairman says he still wants to see further strength especially in employment growth. While the jobless rate has dropped from 8.1% when the stimulus program began a year ago to 7.3% now, the Central Bank considers the rate is still well above acceptable levels. Economic has generally been proceeding as@a moderate pace with continued, albeit somewhat uneven, improvement in labour market condition. Of course to say that the job market has improved does not imply that current conditions are satisfactory. Notably, at 7.3%, the unemployment rate remains well above acceptable levels. Long-term unemployment and underemployment remain high and we've seen ongoing declines in labour force participation which likely reflects discouragement on the part of workers as well as longer term influences such as the aging population. With US inflation running below the Fed's 2% longer term objective, Ben Bernanke said that the bank would continue to monitor it closely. The Fed chairman also recognised the global impact of the US economy, particularly on emerging markets. A stronger US economy is one of the most important things that could happen to help the economies of emerging markets.The news of the delay in cutting back on the stimulus may have taken many by surprise but the Carolly weighed decision has been broadly welcomed by analysts worldwide. One economist agreeing that now is not the time for big pronouncements.To look at how the decision by the Federal Reserve affected markets and what this means for the future of the global economy, I'm joined by John Noonan, senior currency strategist with Thomson Reuters. Welcome. Why did the Fed hold off from this and what are they so concerned about? I think there's four reasonsictually. One, as they State, they're economic, they're not as confident as the markets that the US economy is on a recovery path that can handle that. The second reason is the fact that the yields have been moving up, the markets have been pricing in very, very aggressive Fed tightening over the next 18 months and I think the 3rd reason too is the Fed would like to be able to jawbone raise them, in other words give forward guidance. They're still fine-tuning that. They don't think the forward guidance yet is good enough quantitative easing. I think the is good enough to replace Fed the fourth reason is the fact quantitative that they're more worried what about's happening that they're more DC about's happening in Washington
DC over the debt issues than DC over the debt the markets are. I think Ben the markets Bernanke warned the markets are. I Bernanke warned today, he said Bernanke the fiscal constraints Bernanke warned today, he slow the recovery and it would slow the recovery be very, very bad if slow the recovery and it be very, very bad if the debt be very, very ceiling wasn't extended or the Government ceiling wasn't Government ran out of money. The employment data is not bad as it was but they'd like it to be better so what sort it to be better so of, I guess, real signals will they need to see? The market believed it was going to be 6.5%, that once the employment rate got there the Fed would start tightening or normalising policy. I believe they're looking at other factors now. The unemployment rate, if it goes down to 6.5% but the participation rate continues to fall, that's not a sign that the employment has improved that much, in fact it's a sign that the job market is deteriorating, so I think this is one of the things they're working on in terms of forward guidance, exactly quontedifying what the employment picture has to look like other than just putting on the 6.5% rate. Why are they so concerned about what's going to happen in Washington with the fiscal rates? Are they concerned Capitol Hill will be force last time? More concerned than the markets. The markets have attained this attitude that somehow at the 11th hour, despite all the circus, despite all the dramas, they will come together and come to an agreement. The Federal Reserve sits in Washington DC. They're obviously not as confident about that. They believe that the Fed can't do all the heavy lefting to ensure the economy goes forward, that the politicians have to get together and also do their bit so, yes, they seem to be a little more concerned about that and as Bernanke said, if they don't move the debt selling, extend the debt ceiling forward, that could be catastrophicThe last time wee saw noise about Fed tapering, markets really retraced gains, now they've shot to record highs; is this a bit like a sugar addiction, it is going to be very hard to wean them off easy money? I think it does make it a lot more difficult. I believe the Fed would like to start tapering as they say, would like to scale back their bond purchases. I don't think they're doing it for the sake of pushing stock markets higher or asset prices higher. I think they really are - but they don't want to see the yields move up. They feel that if the yields move up it could hurt the housing recovery and US economy. Until they can replace quantitative easing with another form, say forward guidance, they're going to keep it. As far as the markets are concerned, I think Wall Street is going to get a mixed message from this. Their faith that the US economy is recovering is not as strong as the Fed's so that could throw the markets off a bit and also too y think the markets that will be helped by this are the emerging markets. I think lot of US investors he pored their mun ey back into the US economy and US assets and out of emerging markets will see the liquidity being provided by the Fed and put it back into emerging markets so that's good news. Could we see a serious correction on Wall Street? I don't think so. We closed at all-time highsed to but I don't think we'll see a serious move higher or lower on Wall Street. I think they'll be encouraged by the still liquidity. I don't think Wall Street is going to have the still liquidity. I the big gains. Wall Street is the big gains. The big gains the big could be in commodities, emerging markets and unfOrch ttedly for the emerging markets Australian Dollar.Emerging markets, where are we going to see that boost? This is good news for the e emerging markets because they sold off because they sold off very heavily due to the fact that there was fear that the tapering would mean that funding for some of the emerging market countries with the big current account deficit would be cut off and go into crisis. We saw that with India and Indonesia. This has bought some time for emerging markets. I think yowl veer a pretty good recovery. I think as long as the emerging market countries that were under stress use this window of time provided by the Fed to bolster their economies enough to withstand when tapering finally happens, it's very good news. Let's move on to currencies. This did have a big boost or a big positive effect on the Australian Dollar, it did shoot higher. It that temporary? Well, it's going to be interesting because if you look at the technical aspects, the fact that the market has matured. It looks as if the Aussie dollar could easily go back towards 96 or 97. It closed above 95 cents in the New York market today. The next technicalal resistance is around 96, 97 cents. That will create a headache for the Reserve Bank and I think there's a break on the whole Aussie dollar move up by the fact that the RBA is more likely to cut rates now that the Aussie dollar's higher. The RBA has said many times that the lower Australian Dollar is
helping rebalance the

and they're counting on the rebalancing of the economy to offset the peak and mining - offset peak in mining investment. How long peak in long does it have to be sustained at these levels to force the RBA to cut? Even at 90 cents the ryfrb-E Reserve Bank was saying the move to 90 cents has been helpful but it's still high and needs to move further. The longer it says above 95 cents which could be until the Fed does taper which could be two or three months away, that would upset the RBA and increase the chances of the RBA cutting rates before the end of the year. If the Australian Dollar stays above 95 cents look ands like it gets a foothold above there, suddenly the markets will start talking parity again and that's the last thing the RBA would like to see.John Noonan, thanks for joining us. Thank you, Whitney.The regulators have been out in force rejecting talk of housing bubble and signalling they're not complacent about a property market that's heating up. There was also a clear reluctance from the bank watchdog to follow New Zealand's example and introduce home lending controls. $1.1 million.Talk of a housing price bubble may be keeping prospective home buyers awake at night but not regulators, not yet anyway. We shouldn't be rushing to reach for the bubble terminology every time the rate of increase in house prices is higher than average because by definition that's 50% of the time and you're just going to be unrealistically alarmist by making that call every time that happens.That's not to say the banking regulator doesn't recognise the risks. There are risks that can grow over time in a sustained low -interest rate environment. Risks like banks choosing to relax lending standards in a bid to grow or protect their market share. Stop wondering and start looking because there's a little dragon in all of us. Start asking about our 5% deposit home loans.It's forced some countries, such as New Zealand and Canada, to macro prudential Zealand and Canada, to consider nortedz measures restricting
bank lending to high-risk home borrowers are low deposits. We have the same tools in our armoury that other supervisors have used. We've used those tools in the past, we would be willing to use them if necessary in the future but there are a range of other action as prudential supervisor can take before the course of macro prudential instruments.APRA prefers regulate direct talks with banks about lending practices and risk management. The work, looking forward, is going to be much more face to face, across the table, ongoing supervision, which is really our day job and that's where I think our priorities will be in the next couple of careers. That's a huge relief to a housing lobby which is concerned controls might hamper efforts to boost construction of new houses which is supposed to help support the slowing economy. We seem to be talking about the need for macro prudential controls, for example, as if we have some kind of speculative bubble knocking on our door and the fact of the matter is that simply isn't the case. And those representing self-managed super funds were concerned that the Reserve Bank's singling out of their sector's borrowing property purchases might create the wrong of their sector's borrowing for the wrong impression. There's the a large group of people talking about it and a lot of media around the spruik ing opportunities from the real estate industry and others. There aren't a lot taking it up. Even if regulators did restrict home lending, there are concerns it may force borrowers into the arms of unregulated lenders, lenders who aren't banks or building societies. In other words, more higher-risk borrowers teaming up with higher-risk lenders. rolled
Public service heads have rolled and control of Australia's aid agency has been reinstated to the Foreign Affairs Department. Tony Abbott has been sworn in as the 28th Prime Minister and his minsphry has also taken office. The day one purge and restructure of the public service, including radical changes to AusAID, have come on what the new Government calls a day of action not ceremony. I am Anthony John Abbott, do swear I will well and truly serve the people of Australia.Minute after being sworn in in, Tony Abbott sacked three departmental heads. The Treasury secretary Martin Parkinson is due to stand down next year. Already facing a draw-down on its Budget, Australia's overseas aid and development agency, AusAID, is to be absorbed into the Department of Foreign Affairs so aid and diplomacy can be more closely aligned. The - the
Minister's office says ahead of - the head of AusAID, Peter Baxter, has gone on extend leave. It's not known what this will mean for staffing the aid budget and aid projects. We aim to be a calm, measured, steady and purposeful Government that says what it means and does what it says. You know, these jobs should not be political playthings. These jobs are important. We have professional public servants. They should be respected.Legislation to repeal Labor's price on carbon is being drafted now and without fanfare, military-led Operation Sovereign Borders, designed to stop asylum-seeker boats, is under way. We are determined to honour our commitments to scrap the carbon tax, to stop the boats too, get the Budget under control and to build the roads of the 21st century.The deputy Chief of Campbell, is being promoted to deputy Chief of Army, Angus head the operation and today the Immigration Department will stop issuing permanent Department will permanent protection visas to asylum seekers who Department will stop issuing asylum seekers who have arrived
by by boat. Open for business - that's how Tony Abbott has described that's described Australia as he took the leadership. But how will that sit the leadership. But that sit with commitments to keep a closer eye on foreign investment especially foreign ownership of land? It's a prospect that's already aroused official comment in Beijing. Andrew Michelmore is chief executive of MMG, a mining company mostly owned by company mostly owned by a Chinese State-owned enterprise, and he's warned the Australian Government it must maintain a simple and reliable regime or risk foreign investment. Capital is mobile and we've seen that even with our parent company, that we'll look at opportunities in Africa and Canada and South America. We also look in Australia and Australia should be number one but, gee, where there's uncertainty around the tax regimes and the other authorities then it just why
creates this question of, well, why would I - I'm investing for the long-term, 10, 20, 30 years, gee y thought this was stavel. So we need to get that message across. Andrew Michelmore, chief of MMG speaking the. India's higher education sector is one of largest in the world, catering for no fewer than 25 million students. Once a luxury for many Indians, a degree or diploma is now a reality for the country's growing middle class. As a result, higher education has grown at warp speed but the quality is not necessarily keeping pace. When India became an independent nation six decades ago, the country had less than diploma and degree institutions. Now it has 45,000. 20,000 of those emerged in the past 10 years alone. The capacity buildup has been very, very quick and to some extent quality has not been a core centrepiece of that strategy and I think if you grow that fast it's typically hard to maintain quality.This man is the CEO of Aspiring Minds, a Delhi company that assesses a graduate's employability and helps them find a job that seats their skills. His company has evaluated more than a million graduates and the statistics aren't promising. From graduates as a whole we see 20% employable and 80% not employable. One of the most popular courses in India is engineering. The country produces about 1 million engineering graduates each year. According to research, only 20% of them are qualified to work in their chosen fields. The quality of higher education in India is poor. Accreditation for universities and colleges is voluntary and a bill to regulate them has spent the past three years caught up in a parliamentary log-jam. Students typically at the end of three years have no clue that what they thought was going to build their career and hair life in the future is nowhere close to getting them there.This lack of quality education in India dominated a recent Internet forum run by Our Say, an Australian web-based initiative for citizen-politician engagement. The enterprise, called "if I were a netter" asked youth what they'd do they were politicians. One of the most popular answers, "Improve the quality of education." This group of students is aware that they'll probably have to undertake further study to get into the fields where they want to work. For me the course is very easy. I'm generally into programming and I have put in extra effort outside the curriculum, I read from books and that gives me an advantage over others. The graduates in India are highly aspirational and I think they are leaving no stone unturned to get themselves employable which is a very positive sign.With the working-age population that's growing it's vital growing by 12 million a year, it's vital that these young Indians it's Indians do become employable because India's economy is because India's economy depending on it. depending on it. Who can forget the Datsun 120-Y or 180-B? roads, they're the stuff of nostalgia roads, they're the stuff nostalgia for many but now Nissan is revving up the brand for Indonesian drivers. Japan's developed
second-biggest car maker has developed the locally developed model to much fanitary in Jakarta. The Datsun Go will be on sale next year for around $9,000 and Nissan plans to triple local production to a quarter of a million cars by 2016. The prospect of early-morning starts and few, if any, holidays has been enough to turn many young farmers away from a life on the land but on Tasmania's north-west coast there are high hopes that things are about to change for the better. Production is churning at this dairy farm in the State's north-west. Leigh Suring has 970 cows to milk but is worried his children won't want to carry on the work. I know quite a few families that are like that and that's what will happen. When mum and dad retire, the kids will sell the farm. This brand new agricultural college funded by the forest peace deal, aims to buck that growing trend. But management admits filling classrooms will be a challenge. It can be an exceedingly exciting career, I believe, but we seem to focus on caps on caps off. If we can hold their hand from 18 to 38, we can guarantee they will be very wealthy.While the push is on to keep young people on the land, there's hope a visit at the end Chinese investors looking to
buy farms, buy confidence. More than 30 farms are on confidence. More are on the market. Their sale ked create new employment opportunities. If they can't afford to get into the dairy farm and they have a love of the land, this could help them. And the jobs are desperately needed. Agribusiness Elders is about to close three northern branchwise the loss of 11 positions. Providing another reason for young farmers to stay on the land. I think that as people are out of work for some time they'll realise that farming is much better than being on the dole or social services.Now let's take a look at what's making headlines around the region. The ' Wall Street Journal' reports Blackberry is preparing to cut its staff by 40% by the end of the year. The Hong Kong Standard says competition is increasing between China's State-owned banks. That's all for 'Business Today', I'm Whitney us.
Fitzsimmons. Thanks for joining us. Enjoy your day. Captions by CSI Australia

This morning - offer fencive and illegal. An Indonesian MP condemns the coalition's turn back the boats policy.The policy which is going to be implemented by Mr Abbott clearly annoys our sovereignty as independent country.

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Six dead and dozens injured after a bus and train collide after a in Canada's capital city.Next thing in Canada's capital thing you know I see the train coming and thing you know coming and the light disappeared on the train coming disappeared on the train and I disappeared just seen debris flying the wasn't much of a sound. Wall Street and the Aussie dollar surge as the US Federal Reserve decides against reducing its stimulus program. And team New