Fixed Income Watch: July 3, 2019

Christine Lagarde is set to swap the IMF for the ECB, replacing Mario Draghi at the central bank just as the bloc's economy looks in need of fresh stimulus. Investors will likely bet that as a seasoned crisis-fighter, Lagarde will share Draghi’s taste for aggressive and innovative monetary policy. German Defense Minister Ursula von der Leyen was nominated to be the next European Commission head. The selections, which must be ratified by parliament, mark the first female leaders for both institutions. (Bloomberg)

Australia’s central bank governor signaled he’ll stand pat in coming months to observe the impact of back-to-back interest rate cuts. Reserve Bank chief Philip Lowe, in an evening speech after taking the cash rate down to 1% earlier Tuesday, cited rising risks to global growth from the U.S.-China dispute. In Australia, he noted low borrowing costs, high commodity prices, a weaker currency and rising household incomes were cause for optimism. (Bloomberg)

Oil had its worst reaction to an OPEC meeting in more than four years, as a deal to extend output cuts reinforced concerns over a weak demand outlook. Non-OPEC producers including Russia ratified the group's decision to prolong the existing curbs for another nine months. Ministers also signed a charter intended to make long-term collaboration more formal at their joint meeting. (Bloomberg)

Source : Danareksa Sekuritas Debt Research