Last week the UK voted resoundingly to boot out the Conservative government and replace it with a Labour one. Around 9.7 million people voted for Labour who won 411 seats in parliament in a first past the post system.
The Liberals, Green Party, and Reform UK between them received around 9.45 million votes and collectively won a total of just 81 seats in parliament. The ousted Tories won around 6.8 million votes and 121 seats. The French had two chances to vote. In the first one, the protest against Macron’s centrist party was made clear and for a week or so the right-wing RN party looked like securing a majority in parliament.
During last week some strategic alliances and tactical withdrawals from the second vote ensured this was not to be, with a more left-wing alliance securing a tentative majority in an essentially hung parliament. While Labour in the UK have power and may change some laws it would appear that debate will be noisy in the French parliament and it will be difficult to enforce any major changes in the law.
In the US and Canada last week, the percentage of the workforce unemployed crept up to 4.1% in the US and 6.4% in Canada despite the headline US Non-Farm Payrolls 206,000 print out-performing analysts forecasts.
To this week and it points to being a quiet one; the main economic announcement being US inflation numbers on Thursday.
On Tuesday and Wednesday, Fed Chair Powell pops up to Capitol Hill to offer his testimony to the House and the Senate.
On Thursday we start off with German inflation which is expected to fall to 2.2% y.oy for June. UK GDP y.o.y for May is released at the same time. April’s number was 0.6%. US headline inflation y.o.y for June is expected to fall to 3.1% with Core remaining at 3.4%.
Friday’s main release is US PPI which is forecast slightly higher at 0.1% m.o.m for June. Michigan Consumer Sentiment is also forecast to rise to 68.5% for July from last month’s 68.2%.
Good Luck and Good trading!
Ben Robson is Head of Institutional E-FX at Swiss Finance Corporation. He is also the Amazon Best Selling Author of Currency Kings – How Billion traders Made their Fortune Trading Forex. McGraw Hill 2017
