Today we say farewell to one of my favorite bankers Stanely Fischer who has officially resigned from his position as Vice Chairman of the Federal Reserve Bank in the United States.
Many times when a big banker gives up a big job it’s in order to make room for a bigger one. Like when Fischer resigned from the Bank of Israel in order to take a job at the US Fed a few months later. This doesn’t seem to be the case this time. He’s 73 now, and really, what better position could he go after?
Bankers and politicians are not usually my favorite but for some reason, Stanley inspired me. Perhaps it’s the way that he speaks Hebrew. His knowledge and economic vocabulary is so high that most people don’t understand him and his American accent is so thick that it’s almost humorous.
Here’s an example: https://youtu.be/K6w1hqvRCKk
Now try turning on Youtube’s captions (cc button at the bottom of the video). You won’t regret it.
In any case, Fischer’s resignation provides Trump with a unique opportunity to reshape the Federal Reserve in his own image. At this point, four out of the seven seats at the Fed are unfilled and the bosses chair will become vacant for the President to fill once Janet Yellen’s term expires on February 3rd.
eToro, Senior Market Analyst
Please note: All data, figures, and stats below are valid as of September 7th. All trading carries risk. Only risk capital you can afford to lose.
Donald Trump has made at least three potentially market moving headlines recently. Let’s take a look…
1. Avoiding a government shutdown. Markets have become used to the debt ceiling debates coming down to the wire. Yesterday, Trump denied them that opportunity by making an agreement way ahead of the deadline at the end of September.
Not only that, the deal that he made was not with his own party. Instead, Donald opted for a plan that was put forth by the Democrats. A particularly genius political move.
This spending bill will push off a government shutdown at least until December 15th, when a more permanent budget will need to be implemented.
2. The spending bill did not include funds for the wall. That may come up again in December. It did however include some much needed aid for the citizens of Texas to help them recover from the extensive damage done by Hurricane Harvey.
After devastating entire cities in the Caribbean, another hurricane, Hurricane Irma is on its way to Florida at the moment. We hope that everything turns out alright there but are prepared for the worst.
3. Repealing DACA. Trump gave the order to deport close to 800,000 young immigrants who are currently in the US under a directive from President Obama.
Journalists in the US are now preparing headlines that will no doubt tug at the heart strings of the American electorate about individual stories of kids who are being ripped from their houses to be sent to the third world.
Good thing Trump doesn’t need to worry about approval ratings from the public for at least another 2.5 years. Until then, his battles will mostly on the political stage.
Today the European Central Bank will deliver their rate decision followed by a much anticipated press conference with Mario Draghi.
The Euro is in trouble.
The ECB currently has a very aggressive monetary plan that includes €60 Billion a month being injected into the economy. Draghi has recently hinted that they might be considering to reduce that amount. These hints were met with investors driving up the price of the Euro.
…and why not?
Political risks in the European Union are down significantly. The Greek situation isn’t resolved but at least is safely under the rug at this point. And the US Dollar has been sliding consistently since the beginning of the year.
Until this morning, many analysts were expecting some sort of decision about what the ECB will do next to come at this meeting. However, just today a survey from Reuters indicated that the decision may be postponed until October.
So, today we’ll look especially closely at every word for any hint as to what that decision may be. Even the slightest facial expression or misplaced cough has the potential to move the market by leaps and bounds in this speech.
Any indication that the economy is improving or that stimulus is less needed can push the single currency even higher. Either way, whatever happens, today, know that we’ll be having this same decision in a month. For those of you with patience, this could provide an excellent opportunity.
The update is that there is no update.
The markets have almost fully recovered from the news that China will be banning ICOs. However, they were already in correction mode before that news broke.
So at this point, things are rather flat as traders await the next direction.
Will they catapult to new all time highs or are we in for another massive correction?
This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.
The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.
Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.