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Livesquawk - Closing Wrap - Wednesday 21.07
Closing Wrap - Wednesday 21.07
Headlines
  • McConnell Sets Up Clash In Congress, Says GOP Will Not Vote To Raise Debt Ceiling
  • US, Germany Strike Deal To Allow Completion Of Nord Stream 2 Pipeline
  • US Debt-Limit Measures May Run Out In October, Budget Office Says
  • EU’s Sefcovic: EU Will Not Renegotiate Brexit's Northern Ireland Deal
  • Bitcoin Surges 8 % To $32K As Crypto Markets Recover From Selloff
  • Johnson & Johnson Posts Higher Profit As Healthcare Demand Returns
  • Verizon Results Beat Estimates As 5G Push Attracts More Customers
  • Aon Engaged In Settlement Talks With DoJ As It Seeks Willis Deal Approval
Commentary
With ECB Likely On Rate Hold, Focus Turns To Shifts In Inflation Target, Forward Guidance

The meeting of Eurozone central bankers on Wednesday and Thursday is likely to be fractious as the hawks and doves square off over forward guidance after this month’s adjustment of the inflation target.

 

Following the lead of the US Federal Reserve, the European Central Bank raised its target for consumer price growth. For the Frankfurt-based bank, the increase was a product a strategic review, its first in 18 years. The ECB decided to lift its inflation goal to 2% from near but below that mark. A number of analysts say the policy change fell short of the shift at it US counterpart, which announced in August of last year a willingness to permit inflation that exceeds 2% without raising interest rates.

 

The ECB suggested a readiness to adjust rates should inflation over- or undershoot the new goal by too large a margin. “This target is symmetric, meaning negative and positive deviations of inflation from the target are equally undesirable.”

 

ECB President Christine Lagarde is scheduled to face journalists following Thursday’s monetary policy decision – no rate changes are expected – and she will likely field questions on the increase in the inflation target and the other actions taken following the review, which the bank said included plans to add housing costs to its basket of consumer prices. (LiveSquawk - Continue Reading)

McConnell Says GOP Will Not Vote To Raise Debt Ceiling, Setting Up Clash In Congress

Republicans will not vote to increase the federal borrowing limit, Senate Minority Leader Mitch McConnell said in a new interview, setting the stage for a huge battle in Congress as it stares at a deadline to avoid a debt default.

 

McConnell's threat prompted outrage from top Democrats, warning the GOP leader is playing a dangerous game that could tank the US economy. Republicans argue that it's not uncommon for the majority party to shoulder the burden for increasing the debt limit, a politically toxic vote for lawmakers up for reelection.

 

"I can't imagine there will be a single Republican voting to raise the debt ceiling after what we've been experiencing," McConnell said in an interview with Punchbowl News published Wednesday.

 

Senate Majority Leader Chuck Schumer blasted McConnell in remarks on the Senate floor Wednesday morning, calling them "shameless, cynical and totally political." (CNN - Continue Reading)

US, Germany Strike Deal To Allow Completion Of Controversial Nord Stream 2 Pipeline

The United States and Germany reached an agreement to allow completion of the $11 billion Nord Stream 2 pipeline, a thorny, long-standing point of contention between the otherwise stalwart allies.

 

The agreement reached between Washington and Berlin, which was announced on Wednesday, aims to invest more than 200 million euros in energy security in Ukraine as well as sustainable energy across Europe.

 

“Should Russia attempt to use energy as a weapon or commit further aggressive acts against Ukraine, Germany will take action at the national level and press for effective measures at the European level, including sanctions to limit Russian export capabilities to Europe in the energy sector,” a senior State Department official said on a call with reporters on Wednesday. (CNBC - Continue Reading)

Fed Chair Powell Enjoys Support For Reappointment, But He’s Not A Lock

President Biden’s selection of the next Federal Reserve chair is likely to be a choice between keeping the current chief, who enjoys broad support in markets and among lawmakers from both parties, or replacing him with one of his well-regarded colleagues.

 

Chairman Jerome Powell, whose term expires in February, is viewed by some inside and many outside the administration as the front-runner for the job. But if Mr. Biden decides he would prefer his own pick, rather than the Republican chosen by President Trump, Fed governor Lael Brainard is the most likely candidate to succeed him.

 

“The president will engage with his senior economic team in a careful and thoughtful process to appoint a Federal Reserve chair in a timely manner,” a White House official said. (WSJ - Continue Reading)

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