This week is set to be a pivotal one for the world of business and finance, with several key events set to take place. In the United States, the highly anticipated monthly jobs report is due to be released on July 5th, with economists predicting an increase of 180,000 jobs in June. This follows a surprising large increase of 272,000 jobs in May, which has led the Federal Reserve to hold interest rates steady for now.
Meanwhile in France, voters will head to the polls on Sunday for the first round of an election that has caused some market jitters. Despite concerns over a potential spending surge, Marine Le Pen’s far-right National Rally party has indicated they would be financially responsible. However, French bank stocks are still suffering from double-digit losses and it looks like it might take a while for them to recover.
In Britain, the Labour Party is expected to win by a landslide on Thursday which could boost UK stocks and government bonds. However, the Institute for Fiscal Studies think-tank has warned of vast fiscal challenges that neither party has addressed. The trade-weighted sterling has bounced back to pre-Brexit levels but uncertainties remain as Brexit negotiations continue.
Asia also presents its own set of challenges as the Federal Reserve’s stance and a strong dollar leave little room for immediate rate cuts in countries such as India and China where inflation is still high. Inflation in many emerging Asian economies has fallen within central banks’ targets but policymakers are maintaining higher rates to protect their currencies and prevent inflation from returning. The Bank of Thailand’s Governor will likely reiterate this cautious approach when speaking on Thursday
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