Daily Market Commentary
The effectively extended US Independence Day long weekend, allowed markets to focus on European Geo-Political events, and in particular the UK election. The Conservative Government suffered a historical collapse, at the hands of the victorious Labour Party, but on a low turn-out environment and falling support for major Party's. The 'first-past-the-post' system, allowed the Labour party to take a landslide win, with only a third of the vote, aided by the meteoric rise of Nigel Farage and the Reform Party. The prospects for Britain look particularly grim with the promise higher taxes and higher immigration. The similarities to the Labor Party win in Australia are eerily similar. The same actual governing result can probably be expected. The news delivered certainty to markets, which they enjoyed, and the GBP jumped to 1.2800. Geo-Political attention will now turn to the final round of the Fench Parliamentary elections, where the incumbent, will almost certainly suffer the same fate as the Tory's.
The softer reserve allowed commodity currencies to build on recent gains, with the AUD approaching 0.6750, while the NZD consolidates above 0.6100. The RBNZ will have their latest interest rate decision this coming week, which is expected to be a hold with hawkish commentary. Inflation in Europe and the US will also be a particular focus of markets, with key data set for release.
Weekly Market Calendar
8/7 Japan Current Account, Australia Retail sales, German Trade Exports/Imports, France Current Account
9/7 Australia Consumer/Business Confidence, NFIB Small Business Optimism
10/7 Powell/Yellen Testimony Before Congress, Japan PPI, Australia Building Permits, China CPI, RBNZ Rate Decision, Italy/Belgium Industrial Production, US Weekly Mortgage Applications
11/7 NZ Food Inflation, German CPI, UK GDP, UK Industrial/Manufacturing PMI, US CPI, US Weekly Jobless Claims
12/7 US Budget, Fed Balance Sheet, NZ Business PMI, NZ Credit Card Spending, China Trade Exports/Imports, Japan Industrial Production, France CPI, US PPI, German Current Account, University of Michigan
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