Friday’s session was another quiet one, with macro-economic data releases coming in largely in-line with forecasts. The $ eased from recent highs as the latest inflation readings confirmed the recent downward trajectory. Sterling was largely unchanged after UK Q1 GDP data came in stronger than originally forecast, as markets are more focused on Thursday’s upcoming election. The euro is higher this morning, after early indications from the first round of French election voting show Le Pen’s far-right party set to claim victory, garnering 34% of the vote, but will possibly not be able to gain enough seats to win an outright majority.
*Daily move - against G10 rates at 7:30am, 01.07.24
** Indicative rates - interbank rates at 7:30am, 01.07.24
Macro-economics have temporarily taken a back seat for now as elections in France, the UK, and the US are capturing the market’s attention. However, we expect that trend to take pause as this week sees the release of EU Inflation, minutes from the recent US FOMC meeting, and the US monthly employment report. Although we have seen the euro bounce this morning in early trade on hopes the far-right will not gain an outright majority, we do not expect Thursday’s UK election to be a significant market mover, assuming a landslide Labour majority, as markets perceive both major parties have a very similar fiscal policy.
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