Stockholm (Ekonamik) – The main event last week was the ECB Governing Council meeting. As expected, interest rates were left unchanged, but ECB president Mario Draghi clarified the bank’s forward guidance. More interestingly, the ECB was affected by the threats of increased tariffs to the EU coming from President Trump, and the potential for escalation in his trade war with Europe.
After two years of the Trump Presidency, it is easy to ignore the never-ending stream of tweets and controversies coming from the White House. However, we would argue that the recent nominations of Stephen Moore and Herman Cain to the Federal Reserve Board warrant increased concern and scrutiny. The Fed is at the centre of the international financial system. Attempting to pack it with partisan cronies is a recipe for disaster. Investors should be wary of further steps in this direction.
On the topic of investors’ need to pay attention, Ekonamik also covered Saudi oil giant Aramco and its recent US$ 12 billion bond issuance. The EU and China reached a tentative agreement on the problem of Chinese industrial subsidies, issuing a joint statement following a summit in Brussels.
Investors welcomed Israeli Prime Minister Benjamin Netanyahu’s election win following a tight race. Mr Netanyahu’s win was largely due to his ability to build a governing coalition in the Knesset and a humming Israeli economy.