The flood is coming

By 03/07/2019News
Börse Markt Analyse


03.07.2019 – Daily report. Lots of fresh, cheap money everywhere – that is the hope of investors in global trading. Stock prices are rising as a result. The market applauds Christine Lagarde, the designated new head of the ECB. And in the USA, US President Donald Trump has nominated an advocate of the gold standard for the board of the Federal Reserve – she also advocates the zero interest rate.

Frankfurt with moderate plus

The European Central Bank has given the stock market fresh impetus, the DAX rose by 0.8 percent by Wednesday afternoon. Most brokers predict an ultra-loose monetary policy if the head of the International Monetary Fund, Christine Lagarde, takes over the management of the ECB. Lagarde is to succeed Mario Draghi at the helm of the ECB on 1 October, agreed by EU leaders in Brussels on Tuesday. In response, the interest rate on ten-year German government bonds slipped to a new low of minus 0.397 percent.

Losses in Asia

Investors in Asia were cautious in the face of domestic setbacks. The CSI-300 fell by 1.1 percent to 3,894 points. The Chinese Caixin PMI index for services fell below forecasts. The Nikkei 225 fell by 0.5 percent to 21,638 points in the middle of the week. Here reports caused uncertainty that the government in Tokyo wanted to expand export controls to Korea.

New York with profits

On Wall Street, the major indices made moderate gains the night before. The Dow Jones Industrial rose by 0.3 percent to 26,787 positions. The S&P 500 also advanced by 0.3 percent to 2973 points. And the Nasdaq 100 closed 0.4 percent higher at around 7,800 points. Like the Nasdaq indices, the Dow remained within reach of a new record high, thus following the S&P 500 benchmark. A quick look back: according to an evaluation by the Bank of America, the S&P 500 has produced its best June return since 1955.

Gold increasingly in the spotlight

The price of gold fell moderately to 1,425 dollars. In addition a message, which Goldbugs should be pleased: US President Donald Trump has nominated Judy Shelton for the Board of the Federal Reserve. Shelton is currently Executive Director of the European Bank of Reconstruction & Development. And above all, she is regarded as an advocate of the gold standard. Whether the gold cover of the US currency will ever be reintroduced is written in the stars. But gold reserves could rise under her influence. And the precious metal would thus absorb and sterilize a large part of the liquidity that the Fed could perhaps, perhaps more strongly, pump into the market. Just like in China and Russia, where, in addition to the yellow metal, the immense real estate boom has also absorbed freshly printed money and thus prevented hyper-inflation.

Shelton once wrote in the Wall Street Journal that the Fed must end the practice of parking huge amounts of money in district feds and paying them higher interest rates – this does not stimulate the economy. Shelton has also said elsewhere that if she were ever appointed to the Fed board, she would work to bring interest rates to zero within a year or two. The flood of money would be in the taste of Trump, who had repeatedly curbed the Fed because he thought interest rates were too high.

This is what the day brings

The appointment calendar is full to bursting on Wednesday afternoon. At 2:15pm on Wall Street, the ADP data as an indicator for the official labour market report on Friday will be in focus.
At 2:30pm the US trade balance for May will be published. At the same time the first applications for unemployment assistance in the USA are reported.
At 3:45pm , the Markit Purchasing Managers’ Indices for Services and the Combined Index are due.
This will be followed at 4:00pm by US manufacturers’ new orders. At the same time, the purchasing managers’ index for the non-manufacturing sector is reported by the Institute of Supply Management. At 4:30pm, the Energy Information Administration explains the storage volume for crude oil.
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