{"id":150842,"date":"2019-07-03T08:58:31","date_gmt":"2019-07-03T12:58:31","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=150842"},"modified":"2019-07-03T08:58:31","modified_gmt":"2019-07-03T12:58:31","slug":"lagarde-to-head-ecb","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/07\/lagarde-to-head-ecb\/","title":{"rendered":"Lagarde To Head ECB"},"content":{"rendered":"<div id=\"inves-1474527814\" class=\"inves-below-title-posts inves-entity-placement\"><div id =\"posts_date_custom\"><div align=\"left\">July 3, 2019<\/div><hr style=\"border: none; border-bottom: 3px solid black;\">\r\n<\/div><\/div><p><strong>By <\/strong><a href=\"https:\/\/www.orbex.com\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Orbex<\/strong><\/a><\/p>\n<p>After days of discussion,<strong>\u00a0outgoing EC President Donald Tusk confirmed\u00a0<\/strong><strong>last night\u00a0<\/strong>that European<strong>\u00a0leaders have now made their final nominations.<\/strong><\/p>\n<p><strong>The nominations for the European Commission\u2019s top jobs<\/strong>\u00a0for the upcoming term are as follows:<\/p>\n<ul>\n<li>Christine Lagarde (France) for President of the European Central Bank<\/li>\n<li>Ursula von der Leyen (Germany) for next President of the European Commission<\/li>\n<li>Charles Michel (Belgium) for President of the European Council<\/li>\n<li>Josep Borrell (Spain) for High Representative for Foreign Policy<\/li>\n<\/ul>\n<h2><strong>Lagarde to Head ECB<\/strong><\/h2>\n<p>Notably, the nominations include some impressive firsts. Two women have been nominated for the first time for the roles of head of the ECB and head of the EC.<\/p>\n<p>The nomination of Lagarde for the ECB is particularly surprising. This is because Lagarde herself, who currently runs the International Monetary Fund, has always stated she has no intention of running the central bank.<\/p>\n<p><strong>Lagarde would be the first woman to ever run the ECB.\u00a0<\/strong>She would also be the first ECB president without any prior central bank experience.<\/p><div id=\"inves-2847846728\" class=\"inves-in-content inves-entity-placement\"><hr style=\"border: 1px solid #ddd;\">\r\n<div id=\"inpost_ads_header\">\r\n<p style=\"font-size:10px; float:left; color:#666;\">Free Reports:<\/p><\/div>\r\n<div id=\"inpost_ads\"> \r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/1ApBOV\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2018\/06\/graph_techs_PD.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t     <a href=\"https:\/\/goo.gl\/1ApBOV\"><b><u>Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p><br><br>\r\n<br>\r\n<br>\r\n<p style=\"font-size:15px; float:left;\"><a href=\"https:\/\/goo.gl\/f3RrHX\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/investmacro.com\/wp-content\/uploads\/2019\/01\/cot_pie_80.png\" align=\"left\" width=\"80\"  height=\"55\"\/><\/a>\r\n\t    <a href=\"https:\/\/goo.gl\/f3RrHX\"><b><u>Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p><br><br>\r\n<\/div>\r\n<hr style=\"border: 1px solid #ddd;\">\r\n<br><\/div>\n<h2><strong>Hawk or Dove?<\/strong><\/h2>\n<p>In terms of what Lagarde\u2019s likely stance on monetary policy would be, it is difficult to tell. The IMF head has refrained from any direct comments on ECB monetary policy.<\/p>\n<p><strong>Lagarde is known for her fantastic communications skills.\u00a0<\/strong>And these\u00a0would certainly come in handy in leading discussions among the ECB policymakers as well as in guiding the markets.<\/p>\n<h2><strong>Market Reaction<\/strong><\/h2>\n<p><strong>The initial market reaction\u00a0<\/strong><strong>has seen eurozone bond yields falling and European equities rising.\u00a0<\/strong>This\u00a0suggests that the<strong>\u00a0market is optimistic that Lagarde will take a dovish approach.\u00a0<\/strong>The markets also seem to be relieved that the more hawkish Wiedmann has not been selected.<\/p>\n<h2><strong>OPEC Extends Cuts<\/strong><\/h2>\n<p>As had been widely expected,<strong>\u00a0OPEC agreed to extend its current production cuts.<\/strong>\u00a0They came to this decision\u00a0at the July meeting which concluded yesterday.<\/p>\n<p>However, there was some element of surprise. The oil-producing cartel\u00a0<strong>agreed to extend its current 1.2 million barrel per day cuts by a further nine months.<\/strong>\u00a0This extension will take the cuts through into the end of Q1 2020. This was much longer than the year-end extension the market was looking for.<\/p>\n<p>OPEC noted that when it meets again in December it will review the decision to decide on the next steps.<\/p>\n<h2><strong>Concerns over Demand Remain<\/strong><\/h2>\n<p>The decision to extend into Q1 2020 is based on<strong>\u00a0Q1 typically being a period of low demand. This could lead to inventory build-ups if OPEC began to increase production again.<\/strong><\/p>\n<p>Indeed, demand forecasts for 2020 are showing uncertainty. The EIA recently revised its 2020 outlook lower to 1.2 million barrels per day from 1.4 previously. Despite the latest truce between the US and China,\u00a0<strong>the prospect of a further escalation of the trade war remains a threat.\u00a0<\/strong>As does the\u00a0still record high US crude production which has been continuing to surge higher over the year.<\/p>\n<p>The market reaction will be disappointing for OPEC given the sharp sell-off in crude in response to the meeting. Concerns over the demand outlook for the remainder of the year and into next year, as well as over the<strong>\u00a0ability of OPEC to maintain obedience to the cuts<\/strong>\u00a0are likely playing a part here. However, over the medium term, the extension should\u00a0<a href=\"https:\/\/www.orbex.com\/blog\/en\/2019\/07\/risk-rallies-on-g20-positives\" target=\"_blank\" rel=\"noopener noreferrer\">keep crude supported.<\/a><\/p>\n<h2><strong>Technical Perspective<\/strong><\/h2>\n<p><a href=\"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2019\/07\/oil0307.png\" target=\"_blank\" rel=\"noopener prettyphoto noreferrer\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-85580 size-full b-loaded\" src=\"https:\/\/www.orbex.com\/blog\/wp-content\/uploads\/2019\/07\/oil0307.png\" alt=\"oil prices\" width=\"1596\" height=\"743\" \/><\/a><\/p>\n<p>Oil prices continue to trade into the apex of the large contracting triangle pattern which has framed price action over the last two years. For now, crude is caught between support at the 55.87 level and resistance at the 59.98 level. A break back above here will put focus on a run up to retest the 2019 highs. Alternatively, bears will need to see a break below the 51.06 level to confirm fresh downside.<\/p>\n<p><strong>By <\/strong><a href=\"https:\/\/www.orbex.com\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Orbex<\/strong><\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Orbex After days of discussion,\u00a0outgoing EC President Donald Tusk confirmed\u00a0last night\u00a0that European\u00a0leaders have now made their final nominations. The nominations for the European Commission\u2019s top jobs\u00a0for the upcoming term are as follows: Christine Lagarde (France) for President of the European Central Bank Ursula von der Leyen (Germany) for next President of the European Commission [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-150842","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150842","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=150842"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150842\/revisions"}],"predecessor-version":[{"id":150844,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150842\/revisions\/150844"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=150842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=150842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=150842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}