Global Financial News Recap for July 30, 2019
International Monetary Fun
The International Monetary Fund has narrowed their list for the new managing director. Those selected to replace Christina Lagarde were:
Mario Centeno- Portugal’s Eurogroup Chair (out)
Nadia Calvino- Spain’s Finance Minister (out)
Jeroen Dijsselbloem- former Dutch finance minister,
Kristalina Georgieva - Bulgarian Chief of the World Bank
Olli Rehn- Finlands Central Bank Chief
The deadline for nominations is in early September and the selection will be made by October 4th. The issue must be resolved soon as India, Brazil, and China struggle but things remain slow as members of different parts of Europe don’t want someone from outside camps to take the position. Nevertheless both sides are determined to elect an official with a strong track record in economic policymaking.
Economy Fuori Stagione
Italy’s economy continues to struggle and their GDP faces stagnation. The Eurozone’s overall struggles are affecting the Italians and is causing job displacement for some. The latest sign of this is that jobs were cut in the steel industry and GDP only grew .1% from the last quarter. Global trade tensions have affected them heavily as their economy is heavily dependent on exports. An economics professor at a university there said that the problem is that Italian businesses are predominantly mid size and run by families. They are good at producing but not innovating. Their problems are further exacerbated by the political state of Italy- with a lack of confidence individuals are less likely to consume or invest. Despite job cuts for some, the nation has added a substantial amount in the past quarter.
Navalny Poisoned
That guy, Navalny, who’s been discussed in the last 3 entries was indeed poisoned. Shocker! Once again, he’s the guy who organized protests in Russia pertaining to certain candidates not being allowed to run. This isn’t his first run in with the Kremlin- he himself was banned, has been poisoned in the past, and has lost an eye. You gotta love the commitment! Despite being poisoned, he’s back into his cell and we wish him the best of luck.
Iran: “Lets make a deal” UK: “No Tanks”.
The UK has disagreed to barter over the tanker that was seized by the Iranians in the Gulf earlier this month. The hope was that the two nations would exchange their respective tankers and everything would carry on. Britain initially took the Iranian tanker as it was on its way to deliver to Syria, something not allowed by EU sanctions. The Iranians responded by taking one of the Brit’s. The British think they were right to take the tank because of the sanctions and the Persians think they were right to take the British’s because of polluting. Doesn’t every combustion vehicle produce pollution- Even their own?
Growth Forecast Cut for Japanese
Fears of export slowdown have led the Japanese to reduce their economic growth forecast. This is further exacerbated by the US-China Trade war, where things are taking a toll on Chinese demand for Japanese goods. Their economy is also feeling the effects of a ban on exporting raw materials for semiconductors to South Korea. Naturally, consumers aren’t feeling that confident given these conditions further exacerbating the issue. The new numbers for growth are .9% growth opposed to 1.3% growth.
LSE Booming
The London Stock Exchange Group recently saw a boost in share prices as investors were delighted with the news that they plan to buy Refintiv for 27 billion pounds. Refinitiv is a data company that manufactures desktop terminals that feed market data around the world. The hope is that this deal, orchestrated by Blackstone, will put LSE into a position to compete with CME Group and Bloomberg. One analyst believes this deal might boost LSE’s EPS by 21% Their shares closed up 15% despite fears that the deal might face delays from an antitrust process.
New Austrian Central Banker Keeps an Open Mind
Austria recently elected Robert Holzmann to be the Central Bank Governor. Despite the populist party having put him in power, he has stated that he will not kowtow to their demands. Rather than listen to the critical right wing group he is open to various opinions regarding economic and political opinion. The populists have voiced issues with the EU pertaining to immigration and the state of the Euro- he has vowed to not be swayed by their suggestions.
In other News:
9/11 victims will continue to get compensation, the pound is near a 2 year bottom, and Germany is concerned with growing extremist violence. It’s still going down in Hong Kong, YouTube is facing problems over child targeted videos and data collection and I got in to UCI’s MFin program (cover story). There are also more $100 bills in circulation than there are $1 bills. Hmm.