Summary for the 3rd of July


The Managing Director of the IMF, Christine Lagarde was nominated to take over for Mario Draghi as the President of the European Central Bank. It was last night that the members of the European Council agreed on the future leaders of the EU, which also included Mario Draghi’s successor. There were already talks of Christine Lagarde becoming the next EU president, but many believed her lack of central bank experience and economic background made it less likely for her to be nominated. Even with no central bank experience, she still was considered to bring continuity in the monetary policy. She had been supportive of recent years expansive monetary policies, as well as believed that the implemented unconventional monetary policy such as quantitative easing was necessary. She had the experience from the eurozone debt crisis and had been overseeing the bailouts of Greece, Spain, Portugal and Argentina. These experiences would come in handy in a current polarized political landscape, and the need for a well-coordinated monetary policy is high.

President Trump were looking to fill out the two vacancy at the Fed’s seats. After the last two candidates had withdrawn from consideration, Trump had nominated two new candidates, one of them was The US director of the European Bank for Reconstruction and Development, Judy Shelton, who also didn’t have central bank experience, she had long been outspoken critic of the central bank and advocated a return to the gold standard where the currency is pegged to the value of gold.  Both nominees must first be confirmed by the US senate.  

Indices for 03.07.2019
Dow: +0.3% (2nd of July)
S&P 500: +0.3% (2nd of July)
Nasdaq: +0.2% (2nd of July)
Nikkei: -0.8%  (3rd of July)
Chinese indices: -0.7% (3rd of July)
STOXX Europe 600 Index: +0.85% (3rd of July)

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