Germany

Mario Draghi Hints Trump Will Be Responsible For The Next Financial Crisis

According to Mario Draghi, portfolio manager of the world's biggest hedge fund, it is not his gargantuan balance sheet equal to 36% of the eurozone GDP, nor the $14 trillion in global central bank liquifity that will be responsible for the next market crash, but that Donald Trump's deregulation of the banking industry has "sown the seeds of the next financial crisis."

Trump's Early Foreign Travel Schedule Unveiled

After two weeks of vigorously signing executive orders, 20 as of February 6, undoing Obama-era regulations, and engaging foreign leaders in often heated exchanges by phone, Trump is gearing up to make offshore visits to, as Axios puts it, "reedem himself as a diplomat" in coming months.

Key Events In The Coming Week

It is a relatively light week in the US, with mainly trade balance, JOLTS and consumer credit data out. The key economic release this week is University of Michigan consumer sentiment on Friday. In addition, there are a few scheduled speaking engagements from Fed officials this week. 86 S&P 500 companies reporting, representing 11% of the index market cap

Frontrunning: February 6

  • The Patriots’ Insane Comeback: One for the History Books (WSJ)
  • Euro fades in face of French election risks (Reuters)
  • Legal battles to test Trump and his travel ban (Reuters)
  • Standoff Looms Over Travel Ban; Trump Rips Judge (WSJ)
  • Trump Set to Attend NATO Summit in May (WSJ)

Global Stocks, US Futures Rise Despite Growing Political Tension In Europe

In a relatively quiet session, which may see US traders sleep in a bit after last night's Superbowl thriller, European and Asian shares rose ahead of Mario Draghi’s testimony at the European Parliament, while US equity futures were fractionally higher (up 0.1% to 2,293) after stocks jumped the most in a week, as traders assessed the trajectory for interest rates while scrutinizing every new Trump tweet.

German Default Risk Spikes To Highest Since Brexit As Merkel Lead Plunges To Multi-Year Low

Germany’s Social Democrats narrowed the gap with Chancellor Angela Merkel’s bloc to the closest in more than four years, reinforcing a poll bounce after they chose outsider Martin Schulz to challenge Europe’s longest-serving leader. As Bild reports, the 6-point surge in opposition support was the biggest ever recorded for the party... and may explain why German sovereign risk spiked to its highest since Brexit.

Schauble Agrees With Trump That Euro Is "Too Low" For Germany, Blames Mario Draghi

The euro exchange rate is, strictly speaking, too low for the German economy’s competitive position,” Wolfgang Schauble told Tagesspiegel. “When ECB chief Mario Draghi embarked on the expansive monetary policy, I told him he would drive up Germany’s export surplus . . . I promised then not to publicly criticise this [policy] course. But then I don’t want to be criticised for the consequences of this policy.”