Global markets start week cautiously amid political uncertainty, economic data
(MENAFN) Global markets began the new week on a cautious note due to ongoing political developments in France, Iran, and the UK, alongside concerns about the upcoming US presidential election.
In France, the second round of early general elections saw the left-wing New Popular Front (NFP) winning the most seats in the National Assembly. Meanwhile, in Iran, Masoud Pezeshkian, a reformist politician and cardiac surgeon, was elected president. Across the Channel in the UK, Keir Starmer, leader of the Labour Party, assumed the role of prime minister, ending 14 years of Conservative rule.
In the US, uncertainty continues over the Democratic candidate for the upcoming presidential election, as speculation persists about who might replace President Joe Biden. Economic concerns are also heightened, with market participants eagerly awaiting Fed Chairman Jerome Powell’s forthcoming statements and new inflation data, which are expected to offer insights into the Fed’s future monetary policy decisions.
Last week's US macroeconomic data presented mixed signals regarding the labor market. Non-farm payrolls rose by 206,000 in June, surpassing expectations, although May's figures were revised downward from 272,000 to 218,000. The US unemployment rate edged up by 10 basis points to 4.1 percent, the highest level since November 2021. Average hourly earnings increased by 0.3 percent to USD35, aligning with expectations.
Analysts noted that while the June employment data exceeded expectations, the downward revisions for April and May suggest a softening labor market. The combination of slower wage growth and rising unemployment could lead the Fed to cut interest rates as early as September, with analysts estimating an 80 percent probability. The likelihood of a rate cut in November has dropped to 76 percent, while the probability of a second rate cut in December has increased to 97 percent according to money markets.
MENAFN08072024000045015839ID1108417839
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.