This week, the European Central
Bank (ECB) will take the center stage in the markets. On Wednesday, the bank
will conclude its two-day meeting and release a statement on the monetary
policy. This will come at a time when the EU economy is showing signs of
increased weakness. This weakness has come from countries of all sizes
including the mighty Germany and the small Malta. In the past meeting, the ECB
said that it is likely hike interest rates in December this year. This was
further from the previous prediction of a summer rate hike. This comes at a
time when analysts and investors are worried that the central bank does not
have enough tools to boost the economy in case of a slowdown. This is because of
the prolonged low interest rates.
This week, traders will continue
to focus on the Federal Reserve. This is because of the announcements on the
members who will be nominated by Donald Trump to the board. The president has
said that he will nominate Stephen Moore, who is a prominent conservative who
has openly supported the president’s call for low interest rates. He is the
visiting fellow for the Heritage Foundation. He is currently under scrutiny for
his previous tax avoidance, and for failing to pay for his alimony. Trump has
also announced that he will nominate Herman Cain to the board. Cain is a
prominent republican, a founder of a PAC that supports Donald Trump, and he
former CEO of a pizza company.
In the United States, traders
will focus on Pinterest, the image search company that is expected to go public
soon. The company will begin its roadshow this week. In a roadshow, a company
meets with investors and investment bankers in a bid to win funding and build
confidence when it goes public. According to the Wall Street Journal, the
company will set its IPO valuation to below where it was in the last funding.
This will value the company at more than $12 billion. This IPO will come after
that of Lyft and is expected to be followed by that of Uber, which is valued at
more than $120 billion.
Brexit will be in the headline
this week as the April 12 deadline nears. This is a deadline, which the UK was
given by the European Union. If there’s no deal, the country is expected to
leave the European Union without a deal. In the meantime, the prime minister
has announced that she may ask for an extension as the Labour and Tories start
their negotiations. Therefore, the risks of the UK leaving the EU without a
deal are increasing.
Traders will also watch out for
Israel, which will be holding an election tomorrow. Netanyahu, who is facing
corruption charges will be on the ballot against Benny Gantz and Moshe Feiglin.
Netanyahu is seeking for the fourth consecutive term as prime minister. In this
election, many view it as a referendum of Netanyahu’s performance. While Israel
is a relatively small country, it is a very important one on the global stage
because of its volatile neighbors and its close relationship with the West.
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