Home News News Round Up - Surging Markets, European Musical Chairs, and a Damp...

News Round Up – Surging Markets, European Musical Chairs, and a Damp Squid ID4

Week 27 experienced an early slide but U.S. trading finished with stocks mostly bouncing back, ending with modest losses Friday by comparison to a bumper week for the wider market and breaking a six-day winning streak for the S&P 500, which nonetheless still finished with a weekly gain. Investors were reportedly thrown off by the U.S. Labor Department showing a marked increase in hiring (224,000 jobs) in June, which may affect the Fed’s decision next week (Wednesday) as to whether to cut the benchmark interest rate. Nevertheless, the S&P 500, the Dow Jones Industrial Average and the Nasdaq all reached new highs during the week.

European shares, meanwhile, closed at their highest in over a year Thursday as Italian stocks heaved a sigh of relief that Italy had avoided disciplinary action from the European Commission over its debt (for now). The STOXX 600 Index rose 0.1% on additional encouragement from the nomination of IMF Chief Christine Lagarde to President of the ECB and expectations that she will maintain the bank’s dovish stance. Meanwhile, German 10-year bond yields fell below the ECB’s 0.40% deposit rate for the first time, the U.S. curve yields less than the Fed’s 2.5% target rate and with Britain’s 10-year gilt below the BoE rate as well. A number of European markets showed a similar trend.

On that note, besides Ms Lagarde, European leaders nominated Germany’s Defense Minister Ursula von der Leyen as candidate for President of the European Commission, elected interim Prime Minister of Belgium Charles Michel for President of the European Council, and nominated Josep Borrell Fontelles to become High Representative of the Union for Foreign Affairs and Security Policy, following extended and difficult negotiations. While Italian MEP David-Maria Sassoli has already been elected by MEP’s for European Parliament President, Ms von der Leyen must first withstand a vote in the EP, Mr Fontelles requires the agreement of the President-elect of the Commission, and Ms Lagarde requires the consent of the Council and consultation with the EP and the ECB’s Governing Council.

- Advertisement -

In other EU news, the European Union and Mercosur agreed to a free-trade deal, the largest in the EU’s history, eliminating tariffs on 90% of goods traded between the blocs.

Exit polls suggested Greece’s conservative New Democracy party led by Kyriakos Mitsotakis was on track to gain an outright majority in Greece’s parliament and thereby dislodge Prime Minister Alexis Tsipras’ socialist government in a general election Sunday. The election was called three months ahead of schedule due to Syriza’s poor showing the in European Parliament election in May.

Also Sunday, Iran was set to breach the limit on enriched uranium imposed by the JCPOA agreement in a bid to get European leaders to reset the terms of the deal following the U.S. withdrawal from the agreement last year. IAEA inspectors are verifying the announced development.

OPEC agreed to extend oil production cuts by 9 months, reducing output by 1.2 million barrels per day from October production levels, a consequence of hedging against a slowdown in global demand and expanding American shale production. Meanwhile, Saudi Arabia revived plans for an IPO of Saudi Aramco, the largest oil company in the world, part of an effort to diversify the Saudi economy beyond oil.

America and China agreed to resume trade talks at the G20, as U.S. President Donald Trump retracted his threat of another $300bn on Chinese goods and agreed to allow American companies to sell products to Huawei, in exchange for new Chinese purchases of U.S. agricultural products. The U.S. threatened tariffs on $4bn worth of goods from the European Union instead, in connection with a WTO trade dispute over subsidies to Boeing and Airbus.

Finally, fears that U.S. President Donald Trump was staging a political takeover of the U.S. July 4th Independence Day by holding an unprecedented speech before the Lincoln Memorial replete with tanks, jets and other displays of power more reminiscent of Russia and North Korea than a democracy were perhaps undermined by the President himself. Besides (for once) largely sticking to a script (that nevertheless extolled militaristic triumphalism) rather than veering into his habitual political attacks, Mr Trump managed to suggest, among other things, that the 1775 revolutionary army of independence “took over airports”. The weather also proved inclement. As Mr Trump has proven, however, the most dangerous thing one can do, perhaps, is just laugh at him.






Glenn W. Leaper, PhD
Glenn W. Leaper, Politics Editor, is a political theorist, analyst, editor and writer. He completed his Ph.D. in Political Philosophy and Critical Theory from Royal Holloway, University of London in 2015. His research focuses on ideology, unaccountable structures of power and surveillance capitalism. He is also a communications consultant, speechwriter, interpreter and journalist. Glenn has an international background spanning the UK, France, Austria, Spain, Belgium and his native Denmark. He holds an MA in Literature and a BA in International Relations.

Latest articles

Thriving on Covid-19 Challenges

Stockholm (Ekonamik) - Digitalization has certainly mitigated the impact of COVID-19 on businesses, economies and personal lives. After all, digitalization offers the vital infrastructure...

The Battle of Cheap and Expensive

Stockholm (Ekonamik) - The spread of COVID-19 triggered panic among investors in the first quarter of the year and sent markets reeling and company valuations...

Denmark: A Relative Success Story or Too Soon to Tell?

Stockholm (Ekonamik) - Along with a handful of smaller European countries such as Austria and the Netherlands, Denmark is one nation that appears to...

Challenges and Opportunities in Frontier Markets

Stockhom (Ekonamik) - Given the coverage that Europe and the USA have received regarding the effects of COVID-19, it is easy to forget about...