Weekly Market Update - 13 February 2023

Social Collapse Arising

President Isaac Herzog of Israel has warned that the country is on the verge of “constitutional and social collapse” over a government plan to reduce the power of the judiciary. Herzog echoed widespread concern that the change planned by the new government of Prime Minister Benjamin Netanyahu is so radical that it raises doubts about the future of Israel’s democracy, its appeal to foreign investors and ties to its strongest allies. “This powder keg is about to explode,” Herzog told the nation.

Source: Bloomberg

Reshuffling

President Joe Biden has decided to name Federal Reserve Vice Chair Lael Brainard as his top economic adviser, with an announcement coming as soon as Tuesday, people familiar with the matter said. The president’s selection of Brainard to replace outgoing NEC Director Brian Deese places her alongside another high-profile former Fed official, Treasury Secretary Janet Yellen, as a crucial player on economic policy amid the continuing battle with inflation and as Biden prepares for a likely reelection campaign.

Meanwhile, Japanese Prime Minister Fumio Kishida’s government nominated Kazuo Ueda to helm the Bank of Japan on Tuesday. Eisuke Sakakibara, nicknamed “Mr. Yen” for his ability to influence the currency during his tenure as Japan’s vice finance minister from 1997-1999, says that may pave the way for a rate hike by the fourth quarter.

Source: Bloomberg

Cutting Back

Ford will cut about 3,800 jobs across Europe in the latest sign of industrial disruption caused by the global automotive sector’s shift to electric vehicles. Workers in Germany and the UK will be hardest-hit with about 2,300 and 1,300 positions to be eliminated respectively over the next three years, the firm said. Ford, which is shifting its model lineup in Europe to battery-only by 2035, previously said the lower complexity of electric cars meant it could cut staff from its product development teams. The company is also trimming jobs in the US as Chief Executive Officer Jim Farley targets $3 billion in savings to help finance a costly shift to electric vehicles.

Source: Bloomberg