This week, two different stories dominated chatting in the newsroom.
Do you like water coolers? The antics of the well-known CEO’s antics sparked stirring in newsrooms in London and Singapore with the Nestlé boss resigning from Suntory’s CEO over a private incident and the possibility of purchasing illegal substances.
But what kept the news desk busiest was bond market volatility. Over the past few days, we have shared many guests over the decades about some of the most important yield movements we have seen across the UK gold leaf market and Europe.
And maybe it’ll come next week…
Confidence or lack of confidence, that’s the problem
In the epicenter of European bonds, uncertainty is France.
On Monday, there was a trust vote in the government called by Prime Minister François Beyloux, and the ruling party is almost certainly losing.
Photos by Cuellar | Flickr | Getty Images
Rivals France Insimize, national rallies and the Socialist Party all claim they will vote against the government. This raises the prospect of President Emmanuel Macron calling a snap election, but he is likely to try and assign another centralist caregiver government.
In a client’s straw vote, Nomura discovered that the yields on French government bonds or oats need to move even more dramatically to cause “a great loss of international investors’ trust.” In the memo, the bank pointed to the following rating review of French sovereign obligations by Fitch as an important date for the event to take place on September 12th.
ecb stays with “intentionally lacking knowledge”
Another inflection point this week comes when the ECB meets on Thursday amid growing market volatility.
The central bank is expected to hold interest rates at 2%, and HSBC predicts President Christine Lagarde will maintain the “Dovish bias.” The ECB itself emphasized the need to “deliberately maintain information about future interest rate decisions” in its statements at its July policy meeting.
Marketwatchers hope that Lagarde will be asked about France’s uncertainty at a press conference, but economists predict that they will avoid a direct response.
Economic data:
Monday: German trade data
Tuesday: French industrial production data
Thursday: US inflation data
Friday: German inflation data, UK GDP data
