WGM 110702

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WGM 110702

Needless to say, the outcome of the Greek parliament vote on a new austerity package – a scheme including tax increases, spending cuts and government asset sales – is in focus today. As we discussed in detail earlier in the week, last week’s successful confidence vote that allowed Prime Minister George Papandreou and his cabinet to remain in power make today’s proceedings largely ceremonial. Still, market confidence is likely to get a boost from the outcome as a degree of uncertainty about the current environment is removed, pushing crude prices higher along with the spectrum of risky assets. Key resistance has already been overcome at $92.11 – the intersection the 61.8% Fibonacci extension level and a falling channel top – exposing $94.49 from here. Official DOE weekly inventory figures are also on tap.

Gold Begins Recovery Amid US Dollar Weakness

Spot Gold (NY Close): 1501.40 // +3.35 // +0.22%

As we said yesterday, gold appears likely to follow risky assets higher into the Greek budget vote, with a favorable outcome that boosts overall sentiment likely to weigh on the US Dollar as the safe-haven du jour over recent weeks. Needless to say, gold is priced in terms of the greenback on global markets, so a decline in the US currency puts de-facto upward pressure on the yellow metal. A bounce from support at $1495.92 is already underway targeting initial resistance at $1509.49 and $1534.55, the 38.2% Fibonacci extension level and the underside of a previously broken rising channel, respectively.

IMF Executive Board Selects Christine Lagarde as Managing Director

The Executive Board of the International Monetary Fund (IMF) today selected Christine Lagarde to serve as IMF Managing Director and Madame Chairman of the Executive Board for a five-year term starting on July 5, 2011. Ms. Lagarde, who succeeds Mr. Dominique Strauss-Kahn, is the first woman named to the top IMF post since the institution’s inception in 1944. 

The selection of Ms. Lagarde by the 24-member Executive Board representing the IMF’s 187 member countries brings to conclusion the selection process initiated by the Executive Board on May 20, 2011 (see Press Release No. 11/191). According to the agreed procedures, the Board had agreed to meet with Mr. Agustín Carstens and Ms. Lagarde for the post. The candidates met bilaterally with Executive Directors, as well as the Executive Board, during June 20-23, 2011. In these meetings, Mr. Carstens and Ms. Lagarde had the opportunity to present all relevant information concerning their specific candidacies.

The Executive Board agreed that both were well qualified candidates and the objective was to select one by consensus. Based on the candidate profile that had been established, the Executive Board, after considering all relevant information on the candidacies, proceeded to select Ms. Lagarde by consensus. The Executive Board looks forward to Ms. Lagarde effectively leading the International Monetary Fund as its next Managing Director.

The Managing Director is the chief of the IMF’s operating staff and Chairman of the Executive Board. The chief executive is assisted by three Deputy Managing Directors in the operation of the Fund, which serves 187 member countries through about 2,700 staff from more than 140 countries. 

Ms. Lagarde, 55, a national of France, has been the Minister of Finance of France since June 2007. Prior to that, she served as France’s Minister for Foreign Trade for two years. Ms. Lagarde also has had an extensive and noteworthy career as an anti-trust and labor lawyer, serving as a partner with the international law firm of Baker & McKenzie, where the partnership elected her as chairman in October 1999. She held the top post at the firm until June 2005 when she was named to her initial ministerial post in France. Ms. Lagarde has degrees from Institute of Political Studies (IEP) and from the Law School of Paris X University, where she also lectured prior to joining Baker & McKenzie in 1981.

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