Goldman Sachs, Richard Gnodde
Goldman Sachs, Gnodde: “Investors are no longer focusing on Europe. Here’s why”
Goldman Sachs, one of the largest investment banks in the world, is very concerned about political instability at the European level. This was revealed by the CEO of Goldman Sachs International Richard Gnodde. The South African banker takes stock of the investments at a European level, also due to the moves of Fed And ECB. “Today – says Gnodde to Il Sole 24 Ore – The United States and Europe are in a different position. In Europe, the ECB has started to move on interest rates while we are still waiting for the Fed to do something. The key point is that we have continued to see economic strength in the United States and also the improvement of economic conditions in Europe. Inflation has been “stickier” in its downward trajectory than might have been expected, while the labor market has been solid in Italy and across Europe and particularly robust in the United States. In a certain sense, therefore, rates did not fall due to economic strength. And of course we all want economic stability.”
“For the remaining part of the year – continues Gnodde to Il Sole – we potentially expect two rate cuts in the United States. If you look at the job market in the US, employment data continues to be positive. But if you look at the available jobs, this number is decreasing rapidly compared to the beginning of the year. While the ECB has started cutting rates and we expect it to potentially continue to do so two more cuts until the end of the year“. Gnodde then focuses on the situation in France and considers next week’s elections a “market event“.
“For now – explains the CEO of Goldman Sachs International – it is really difficult to predict their outcome and the consequences on the markets. I believe that the main hypothesis is that of a parliament suspended or driven by one right-wing majority. Some polls do not rule out a victory for the left. It is clear that, if a majority does not emerge, France could be exposed to a certain degree of continuing instability. The global investors they were really aiming about Europe and, obviously, this French instability has caused many of these investors to reposition their portfolios and stay on the sidelines for now, observing what happens before returning to Europe“.
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