The coming week is set to be a dramatic one.
In the UK, the fallout from Deputy Prime Minister Angela Rayner’s resignation on Friday and the snap reshuffle that took place over the weekend will begin play out. There’s no telling how the market’ will respond to the new look Labour government.
In the US, Friday brought dismal job market news, showing a further decline in open positions. Worse still, revised June numbers show the US job market actually shrank for the first time in five years. Tomorrow brings new payroll data and Thursday sees the Bureau of Labor Statistics publish fresh inflation rate numbers, both of which have the potential to pile pressure on the Federal Reserve to cut interest rates next week.
Not to be outdone, today the French government is expected to vote out its Prime Minister, François Bayrou. If the politician loses it will force President Emmanuel Macron to seek his fifth Prime Minister in two years.
With such major changes on the horizon in the UK, US and EU, it is impossible to predict how the markets will respond through the week.
For instance, how will traders respond to the reshuffled Labour government and what will analysts says this means for the looming autumn budget? How will the EU and euro react if France ejects its Prime Minister and finds its upper and lower houses in political deadlock? What does the declining labour market in the US mean for President Donald Trump’s tariffs and the pressure on the Fed?
There are no clear answers to these questions or what they will mean for exchange rates.
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